The Government is "determined" to address housing affordability, Prime Minister Jacinda said today as house prices hit a new record.
The median national house price has reached $925,000, up 23.8 per cent annually, begging the question about when the $1 million threshold might be reached.
But banking economists said based on monthly changes, the market was heading down.
ANZ economists Sharon Zollner and Finn Robinson said: "Annual house price inflation is past the peak and on a monthly basis, November price gains were the second-lowest we've seen since the end of lockdown in 2020.
"Housing headwinds are starting to be felt and we expect that house prices will struggle to grow much further as we head into 2022. We're not yet forecasting any significant declines in house prices, but it's a downside risk that is well within the realms of possibility as mortgage rates rise and tighter regulations reduce lending growth," they said.
But Real Estate Institute data out today emphasised annual changes. That showed national prices shot from $747,000 last November to $925,000 last month. Auckland's median rose 26 per cent annually from $1,030,000 last November to $1.3m last month - another record median.
Of the 24 territorial authorities with median prices, a quarter were in Auckland.
Asked to comment on housing policy, Ardern said the Government was "using all the tools available", such as changes to tax settings, supporting first home buyers and increasing supply.
"We are determined to see a change in housing," Ardern said.
"No one is arguing that a collapse in the housing would be acceptable, but we cannot afford to see year on year these dramatic increases in prices".
All seven Auckland districts had median price increases and six reached median highs, with only the Franklin District not included in that.
Jen Baird, REINZ, chief executive, said: "The market has settled back into its stride, returning to business as near-usual. November shows an active market where property prices continue to increase, stimulated by demand as New Zealand prepared to leave alert levels behind.
"We're seeing a firm property market, with all regions experiencing annual growth and 24 territorial authorities reaching new record medians.
"While the supply versus demand imbalance continues to push prices up, across New Zealand inventory levels increased 5.1 per cent annually and listings increased 9 per cent, providing buyers more choice and giving reluctant sellers confidence that if they take their current property to market, they will be able to buy their next one.
But she cited Government measures to cool the market, the Reserve Bank's OCR increases and banks tighter lending criteria.
The number of sales fell 18 per cent annually, from 10,220 last November to 8381 last month. However, this volume is 12.4 per cent up on last month and the second-highest number of sales in a November month since 2006.
The national median rose 3.7 per cent from October to November, from $892,000 to $925,000.
Auckland's monthly median rise was 4.4 per cent from $1.24m to $1.3m.
Auckland, Canterbury, Manawatu-Whanganui, Nelson, Otago, Southland, Waikato and Wellington all had their highest sales count since April.
In Auckland, the number of properties sold decreased by 19.6 per cent annually — from 3857 to 3102.
The REINZ House Price Index, which measures the changing value of all residential property, showed an increase of 27.2 per cent annually to 4281 which is a new high.
This is now the sixteenth consecutive month of a new high.
Westpac acting chief economist Michael Gordon said: "House prices continued to rise at a solid pace in November with no clear evidence just yet that higher mortgage rates are cooking the market.
"We estimate that sales were down about 3 per cent in seasonally adjusted terms, although given the usual undercount on the first report they were probably closer to flat. As with prices, sales have come off from last year's peak but are not low by any means, currently sitting around pre-pandemic levels," Gordon wrote in reaction to the REINZ data today.
"The screws are starting to tighten on the housing market, with a sharp rise in fixed-term mortgage rates over the last few months as the market has factored in a series of rate hikes by the RBNZ," he said.
Low mortgage rates were the biggest factor fuelling house price growth over the last two years. He expects that to work in reverse as mortgage rates rise from their lows.
" The November figures don't give a clear sense that things are slowing, but we'll continue to watch the impact over the coming months," Gordon said.
The Reserve Bank Te Pūtea Matua says house prices were above their sustainable level.
Governor Adrian Orr said they are above a level that is sustainable given the outlook for the supply of, and demand for, housing.
"The key drivers of housing supply and demand have turned around," he said.
The underlying demand for housing has declined significantly due to low population growth since the outbreak of Covid-19 last year. At the same time, house building is at record high levels and mortgage interest rates are rising," Orr said in August.
"We expect house price inflation to moderate significantly in the period ahead. In our projections, house prices are assumed to eventually fall as momentum in the housing market fades," he said.