The total value of New Zealand residential property is close to $1 trillion, according to a new report.
Property Institute of New Zealand and data company Valocity figures show that nationwide, the total value of residential property, taken as a single entity, rose from around $667,718 billion in 2015 to $941,611billion in 2018 - a rise of 41 per cent.
The report also showed that the value of residential housing in all main centres is also up – although the impact of this growth in value is uneven with Tauranga at one extreme with growth of 63 per cent and Christchurch at the other extreme with growth of just 11.6 per cent over the three years.
Institute chief executive Ashley Church said that the biggest surprise in the report was the finding that house price growth was stronger, in 2017, than it was in 2016.
"There's been a general consensus that the market has been flattening – but this data suggests that it's more a case of growth moving away from Auckland to other parts of the country,'' he said.
It wasn't unexpected as house price booms in regional centres usually start later than Auckland and continue for a while after a boom in Auckland has ended – but the extent of the strength of those prices, particularly in Tauranga and Wellington, was surprising.
Church said that the news was good and bad.
"We don't tend to think of residential property as part of the productive sector of the economy – but when you see the growth in house values, like this, as a combined figure, you can appreciate that the country is now worth more and that our common wealth as a nation has increased.''
That had positive implications for lower interest rates, improvements in international indicators, and an improvement in preparedness for increased numbers of New Zealanders entering retirement.
In all cases, except Hamilton, price growth in 2017 was the same, or greater than 2016.
Church said that the figures also mean that many of those of who own property are now wealthier than they were three years ago but that wasn't all good news.
"The report also tells us that houses are now even more expensive – and not just in Auckland – which means it's even harder to get into the market than it was three years ago".
"It also means that the baseline cost for 'affordable' housing programs - such as Kiwibuild - will keep increasing as land and building costs increase. That's a strong argument to get those houses built as quickly as possible".
Church said that the figures also mean that the economy has now become even more sensitive to interest rate increases.
"To the extent that this increase in house prices is mortgage funded we're now that much more susceptible to a major hit on the economy if interest rates were to increase too much over the next few years".
Auckland is now worth $469b (up from $344b in 2015)
Wellington is now worth over $88b (up from around $60b)
Christchurch is now worth over $67b (up from around $60b)
Tauranga is now worth over $34b (up from around $21b)
Hamilton is now worth around $28b (up from around $18b)
Dunedin is now worth almost $17b (up from around $12b)