‘Unsustainable’: Real estate industry says ‘unaffordable’ house price rises have to slow down

Prices hit new records across most of the country in March, according to the latest figures from the Real Estate Institute of NZ (REINZ), which represents the industry.

The nationwide median price was $826,300, up a whopping 24.3 percent since March 2020 and $46,300 in a single month – more than a person on the minimum wage earns in a year.

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Auckland’s median went up 18.5 percent to $1.12 million. Other regions that hit new highs were Northland, Waikato, Gisborne, Hawke’s Bay, Manawatu/Whanganui, Tasman, Marlborough, West Coast, Canterbury. Otago and Southland.

Narrowing it down further, the most expensive district remains Queenstown-Lakes, with a median price of $1.185 million, narrowly ahead of Auckland.

“The Manawatu/Wanganui region has now had 9 record median prices in a row, 10 of the last 12 months were record or equal record prices for the Waikato region, seven of the last eight months were records for the Canterbury region and the Auckland region has hit another record median price,” said REINZ acting chief executive Wendy Alexander.

“These sorts of price rises are unsustainable and show just why New Zealand continues to top the league tables of most unaffordable nations in international studies.”

The most recent report from Demographia said Auckland had the fastest-deteriorating housing market in the world in terms of affordability, with prices more than 10 times household incomes and rising faster than in any other major city in the world.

“Additionally, we’re seeing houses sell at their fastest pace in a March month ever and we’ve seen the highest percentage of auctions the country has ever seen since REINZ began keeping records, showing just how quickly the market is moving,” said Alexander.

More than 9720 properties were sold in March – up 31.2 percent on March 2020, a “sizeable” increase even taking into account six days of March 2020 were lost to the COVID-19 lockdown. REINZ said this was surprising since new loan-to-value restrictions [LVRS] came in on March 1, 2021.