Record house prices leave sellers in tears as buyers fight to win

A Kiwi property expert has revealed in his 18 years as a real estate agent, he has never seen so many owners in tears at auctions due to record house prices.

The Real Estate Institute of New Zealand (REINZ) revealed their data for November on Friday, which showed the national median house price has skyrocketed to $749,000.

The price was an increase of 18.5 percent from the same time last year, with 9885 residential properties sold in November 2020.

However, at the same time the number of properties available for sale nationally has decreased 16.9 percent since last year, according to REINZ's inventory data.

Harcourt's general manager for the Lower North Island's Team Group Marty Ritchie told Newshub "it's a frenzy out there".

"Using yesterday as an example we had 13 properties up for auction along the Kapiti Coast which encompassed Paramata up to Levin. Twelve out of 13 sold and I've never seen so many owners in tears with the prices they achieved... I've never seen so many owners happy to have bought."

He said there is not a single Harcourts office in the lower North Island where the market is not "going nuts".

"If you are looking to buy in Otaki it's crazy, if you are looking to buy in Upper Hutt it's crazy, if you are looking to buy in Wainuiomata it's crazy, it's just everywhere."

He said the market is currently "a bit like a lolly scramble", with real estate companies fighting hard to achieve listings.

"I've never seen this amount of shortage of stock, and it's the shortage of stock with the well-presented properties which is creating the ability for people want to get in there and fight for properties and people are fighting for properties like I have never seen before."

Two weeks ago the Reserve Bank announced  that subject to final consultation, it intends to restore loan-to-value ratio (LVR) restrictions to previous levels from March 2021, which restrict how much banks can lend to low-deposit borrowers.

But Ritchie said he doesn't see it making much of a difference to the market.

"Until we build a whole lot of new houses, I can't see us climbing out of this. I think it will continue," he said.

"They can try things with LVR, they can try different techniques and things like that, but until we get the stock supply that can satisfy everybody I think we are going to continue the way we are with what feels like crazy growth - but then you look back in six months' time and it actually feels quite reasonable."