Economists say the housing market's resurgence won't last after prices defied pandemic effect predictions and rose nationally 9.2 per cent from last June's $585,000 to $639,000 last month.
Westpac senior economist Michael Gordon said the market continued to play catch-up after the alert level 4 lockdown in March and April but he is forecasting that to change.
"We're not convinced that either sales or prices will be sustained at these levels. The jump in sales is likely to reflect pent-up interest by both buyers and sellers following the lockdown period. Meanwhile, prices are caught between much lower borrowing rates in the near term and a severe hit to economic activity that may become more apparent later in the year as the wage subsidy expires, unemployment rises and the international tourism market remains out of action," Gordon said today.
Mike Jones, ASB senior economist, said: "We don't think we're out of the woods yet. There's every chance that June housing data has been inflated by the same release of pent-up demand that is running through a bunch of other New Zealand economic statistics at present.
"We expect small monthly falls in house prices to resume. We remain at the less-downbeat end of the forecasting spectrum though, calling just a 6 per cent peak to trough fall in prices," Jones said today.
ANZ economists, headed by Sharon Zollner, also questioned the sustainability of the rally: "We expect that the impacts of the downturn will be more apparent later in [the second half of this year], with the housing market not immune."
Income relief from wage subsidies, mortgage holidays and low mortgage rates were providing cash flow relief for households, and supporting the market, especially with impacts of the current downturn on the labour market not expected to fully bite until later this year, ANZ said.
REINZ said June marked 105 months in a row of national prices increases. Excluding Auckland, the national median rose 11.3 per cent.
Waikato set a June record of $615,000, up from the previous record of $600,000 set last month.
"Earlier this year, there were a number of predictions that house prices would fall post-covid," said institute chief executive Bindi Norwell.
"However, we are yet to see any evidence of that happening with every region in the country seeing an uplift from the same time last year, and 10 out of 16 regions seeing an uplift from May.
"With wage subsidies and mortgage holidays still in place and demand for good property exceeding supply, we wouldn't be so bold as to say there won't be an easing of pricing in the coming months when these support mechanisms come to an end. But right now, Kiwis' love affair with property continues unabated – especially with the low interest rates we currently have in the market," she said.
Gisborne had the largest annual median price rise, up 29.4 per cent from $340,000 last May to $440,000 last month. Otago and Southland prices rose 21.7 per cent and 19. per cent.
"Looking at the Auckland region, prices increased when compared to the same time last year in all districts except Papakura which saw a 7.9 per cent fall in median price from $710,000 to $654,000. Auckland city was the only area with double-digit increases, with a 17.1 per cent rise to $1,147,500, $13,500 off the record set in March this year," Norwell said.
The number of properties sold in June nationally rose 7.1 per cent annually to hit 6625. That was the highest number of properties sold in a June month for four years
In Auckland, the number of properties sold in June increased by 9.4% year-on-year from 1878 to 2054.
Owen Vaughan, editor of NZME-owned real estate site OneRoof, said the surge in buyer activity and price rises over the last two months had defied a lot of people's expectations about what the market would do post-lockdown.
''The figures suggest that Kiwis decided that regardless of what was going on outside of New Zealand, they were going to buy and sell. But it is important to note that sales volumes are still significantly down on previous years and that inventory available for purchase remains significantly constrained," he said.
James Wilson, valuation director at OneRoof's data partner Valocity, said whereas demand levels among certain buyer groups, notably first home buyers, remained strong, and there is hype around good quality stock, there were signs of variations at a sub-market level.
Certain property types such as apartments and smaller investor stock was showing softer demand levels.
''If pressure begins to rise on existing homeowners, for example when mortgage deferrals end, this may change the overall confidence levels currently evident in the market."