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.
The number of homes sold for more than $1 million in March rose by 5 per cent to 1,360 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 2,657 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 up 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 today, 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.
"Although this gives the overall impression of rising prices, the underlying data shows that the median is moving more due to differences in the mix of dwellings being sold each month."
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. Sales volumes in Auckland increased 66 per cent from February and the number of houses available for sale rose 47 per cent.
In other areas reaching new record high prices, Northland recorded the largest percentage increase, up 27 per cent to $445,000, Waikato/Bay of Plenty rose 17 per cent to $487,000, Hawke's Bay jumped 24 per cent to $385,000, Manawatu/Wanganui advanced 16 per cent to $270,000, Taranaki rose 18 per cent to $370,000, Canterbury/Westland increased 3.5 per cent to $440,000, and Otago lifted 14 per cent to $320,000.
Elsewhere, the Wellington median price rose 14 per cent to $525,000, Nelson/Marlborough increased 13 pe rcent to $465,000, and Southland gained 7.1 percent to $225,000. Bucking the trend, Central Otago Lakes slipped 1.7 percent to $690,250.
"We expect house price growth to be muted over 2017 but strong population growth combined with sluggish housing construction will continue to provide a floor to house prices," ASB Bank economist Kim Mundy said in a note.
The number of sales rose 36 per cent to 8,505 in March from February, reflecting a normal pick up in activity in what is generally the busiest month of the year, the institute said. Sales volumes were 11 per cent lower than March last year.
Nationwide, the number of properties available for sale declined, with 2,397 fewer houses for sale in March this year compared with 12 months ago, the institute said.