PHOTO: Will opening the borders make house prices go up or down? The AM Show – Getty Images/REINZ
New Zealand house prices have increased faster in the past 12 months than since records began, according to analysis described as the industry’s “gold standard”.
The Real Estate Institute of NZ’s (REINZ) House Price Index (HPI) shot up 29.8 percent in the year to May 2021, while the nationwide median eased slightly to $820,000 – but was still up 32.3 percent in just a year.
“This is the highest annual percentage increase in the HPI that we’ve seen since records began and is the 12th consecutive month that we’ve seen a new high, showing the continued strength of the market,” said REINZ acting chief executive Wendy Alexander.
The HPI, used by the Reserve Bank and the major commercial banks, tracks property prices based on “a range of attributes such as land area, floor area, number of bedrooms etc to create a single, more accurate measure of housing market activity and trends over time”.
This means if there are fewer sales of higher-priced large properties in a particular month for example, but more sales of smaller, cheaper properties, the HPI can still go up, even if the overall median goes down.
So while the median sale price dropped from April’s $825,000 to $820,000 in May, the HPI continued rising – from 3804 to a record-high 3857.
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