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NZ house prices hit record high in March

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New Zealand’s median house price rose 10 per cent to a new record in March, reflecting a lift in the number of higher-value properties sold, according to the Real Estate Institute.

The national median house price increased to $546,000 in March from $495,000 recorded in February and in March last year, the institute said.

Higher-value New Zealand homes such as those in Eastbourne, Wellington are selling well, boosting median home values as ... Higher-value New Zealand homes such as those in Eastbourne, Wellington are selling well, boosting median home values as determined by property transactions. Photo: Fairfax NZ

The number of homes sold for more than $1 million in March rose by 5 per cent to 1360 from a year earlier to make up 16 per cent of all sales, a new record for both the number and percentage of homes sold, the institute said.

Those sold for less than $400,000 dropped by a third to 2657, to make up 31 per cent of all sales.

Record migration and low interest rates have bolstered the country’s housing market, prompting the Reserve Bank to tighten mortgage lending rules to reduce the risk to the nation’s financial stability.

The institute has teamed up with the Reserve Bank to develop a new house price index, released on Thursday, which it says better reflects underlying house price movements, with the latest data showing the median price increased because of more sales in higher price brackets than lower ones.

“The HPI numbers are backed by anecdotal evidence from around the country saying that investors and first home buyers are facing more challenges in securing bank lending compared to this time last year, which is lowering the number of dwellings sold in the lower price bracket,” said institute chief executive Bindi Norwell.

“As a result, there are comparatively more sales in higher price brackets, which is lifting the median price.”

Eight of 12 regions around the country recorded new record high median prices in March, the institute said.

In Auckland, the country’s largest city, the median price rose 8.5 per cent to a new record $890,000 from the year-earlier level, and was 11 per cent higher than in February.

In other areas reaching new record high prices, Northland recorded the largest percentage increase, up 27 per cent to $445,000.

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