The average house price in New Zealand will hit $1 million before year's end, if recent trends continue.
The latest Quotable Value figures, out Monday, show the average value nationwide is now $913,209 - up 8.9 percent in just three months. At that rate, the $1 million mark will be reached by September.
The average is now more than twice what it was as recently as December 2013, has risen just under $300,000 in two years and is up 37 percent since Labour took power in September 2017.
Despite the Government's moves in March to remove tax "loopholes" from investors, prices just keep going up, fuelled by ongoing lack of supply and low-interest rates. The pace actually increased in the three months to April, up 21.4 percent in the past year compared to 18.2 percent in the year to March.
"We'll all just be guessing the impacts of the recent tax changes until we get another couple of months of sales data to analyse," said QV general manager David Nagel.
"But there's certainly an expectation that we'll see at least a slowdown in the rate of value growth, with potentially less investors and maybe a few more first-home buyers entering the market over the coming months."
That's a view held by other analysts, such as CoreLogic, which last week said there's growing anecdotal evidence of lowered demand from investors.
On May 1, the Reserve Bank brought in tougher loan-to-value ratio (LVR) restrictions on investors, requiring a 40 percent deposit, up from 30 percent in March. The most recent change came too late to show up in QV's latest figures. Last time the Reserve Bank put in a 40 percent deposit requirement, in 2016, prices stagnated until they were removed.
But recent predictions the market would slow down have so far proven false - predictions the market would crash thanks to COVID-19 proved woefully off the mark, and QV late last year said March's implementation of 30 percent deposit requirements for investors would hurt - but there's no evidence of that showing up yet.
Figures from other property data sources have found similar spikes in prices lately - CoreLogic reporting an 18.4 percent year-on-year increase to $845,491 and the Real Estate Institute of NZ (REINZ) coming up with a 24.3 percent rise to $826,300 in March.
Both CoreLogic and REINZ use median figures, while state-owned QV uses the mean, which typically tracks higher than the median as it's more influenced by prices at the upper end of the market. The last time prices rose more than 20 percent in a year was early 2004, and before that, brief peaks in the 1980s, CoreLogic data shows.
Auckland's average price now sits at $1.3 million, up 19 percent in the past year and rising faster than in March. The most expensive suburbs are the North Shore and central suburbs, around $1.5 million.
West Auckland's now a million-dollar area, at $1,053,677 - but still below the city's average, as are Rodney ($1,200,127), Manukau ($1,152,181) Papakura ($902,832) and Franklin ($840,173).
Papakura had the fastest quarterly growth, up 10.4 percent.
"There has been little in the way of a slow down after last month's Government announcement, but the market does appear to be less frenzied now than it was earlier this year," said QV senior consultant Rupert Yortt.
"Some buyers have adopted a 'wait and see' approach, which has resulted in less attendance at open homes and auctions. This could potentially indicate that the balance between vendor and purchaser expectations may be switching slightly. Overall, I expect to see the market stabilise further as we head into winter."
The biggest quarterly gains anywhere were found in Napier and Hastings, up 14.2 and 14 percent respectively.
"We're starting to see some interesting regional trends emerging, with the strongest value growth occurring in the southernmost regions of the North Island," said Nagel.
"The Hawke's Bay region, Manawatu-Whanganui and also the greater Wellington region are all showing very strong month-on-month value growth with Hawke's Bay leading the pack at 4.9 percent monthly growth.
"The two southern regions of Otago and Southland are showing much more conservative monthly growth of just 2.1 percent and 2.5 percent respectively."
Tauranga's hit $992,087, and will hit $1 million before June, QV expects.
In February, Auckland's property values were ranked amongst the least-affordable in the world, with prices 10 times household incomes - with prices going up 40 percent more in 2020 than the median household earned.
The regions and cities, ranked
- Queenston Lakes $1,383,181
- Auckland $1,306,913
- Wellington $1,028,913
- Tauranga $992,087
- Napier $798,568
- Hastings $797,034
- Hamilton $792,772
- Nelson $765,247
- Taupo $754,700
- Palmerston North $687,537
- Rotorua $663,642
- Dunedin $659,447
- Taranaki $636,439
- Christchurch $624,285
- Canterbury $594,279
- Invercargill $436,759