Auckland 'halo' effect sends property prices to new high

Auckland's median sale price rose from $614,050 last August to $740,000 last month and prices were up $5000 since July. Photo / Doug Sherring

New Zealand national median house prices have set a new record at $484,650, up $64,650 annually, as Auckland landlords and first home buyers cause a "halo" effect by buying around the country.

The latest Real Estate Institute data is just out and chief executive Colleen Milne cited Aucklanders as being responsible for price boosts in many other areas.

"There is continued evidence of Auckland investors and first-home buyers spreading to other regions causing a "halo" effect, most notably in Northland and Waikato/Bay of Plenty. These regions have recorded very strong sales growth so far during 2015, and this is now starting to be seen in the median price data. There was also a very strong increase in auction sales for Waikato/Bay of Plenty," she said.

Auckland median prices are continuing up, with "a rise of $156,000 (25.4 per cent) for Auckland's median price, from September 2014 to September 2015, from $615,000 to $771,000, and a $31,000 (4.2 per cent) rise compared with August 2015," the REINZ commentary said.

Colleen Milne said foreign buyers were not as active in Auckland.

"The new IRD number requirements may have had some dampening effect on offshore buyers in Auckland, although this is not shown in the data. However, the forthcoming relaxation of the loan-to-value-ratio (LVR) restrictions for the regions will have a positive effect for first home buyers but may add to the consequential shortage of listings in their range.

The lowering of interest rates has also had a positive impact on buyer sentiment in the regions, although the effect is hard to measure in the Auckland market," she said.

Nationally, there were 8174 unconditional residential sales in September, a 38.3 per cent increase on last September and an increase of 5.3 per cent on August.

"The national median house price rose $19,650 (+4.2%) to $484,650 from August to September to reach a new record high. In comparison with September 2014 the national median house price increased by $64,650 (+15.4 per cent), with all, but one, region recording increases," REINZ said.

"Auction sales in Auckland reached a new milestone with the number of auctions representing a majority of sales for the first time. Auction sales in Waikato/Bay of Plenty also set a new record, representing more than one quarter of all sales for the first time."

See the latest REINZ property stats here: