Upper Hutt in Wellington has taken out the country's top spot for house price growth, with a 38.1% increase over the 12 months to the end of February, according the Real Estate Institute of New Zealand House Price Index (HPI).
Queenstown-Lakes had the lowest annual growth at 7.4%.
The REINZ's February sales data shocked even seasoned market commentators when it was released on March 11, showing median house prices across the entire country had increased by $50,000 in the month of February, with a $100,000 monthly increase in Auckland.
But median and average selling prices can be skewed by changes in the mix of properties sold at the bottom or top ends of the market, whereas the HPI adjusts for those differences, giving a better overall picture of the rate of price changes.
However the HPI also suggests house prices have been raging out of control since the Reserve Bank slashed interest rates and removed loan-to-value ratio (LVR) restrictions last year (LVR restrictions were reinstated at the beginning of this month).
According to the HPI, Queenstown-Lakes was the only New Zealand district where house price growth was not in double digits over the 12 months to February. In most districts it was above 20%.
Across the entire country, house price growth was 21.5% in the year to February.
In the main centres price growth was greatest across the Wellington region at 29.2%, followed by Auckland 22.2%, Christchurch 18.3% and Dunedin 14.1% (see the table below for all districts).
The HPI also suggests the rate of price growth has been increasing, with growth across the entire country of 5.2% in the month of February compared to 8.7% in the three months to February.
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REINZ House Price Index - February 2021
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61 Comments
Why is this a news or anyone surprised as the Queen of NZ (unfortunately in democracy if one gets full majority becomes one till just before next election - power corrupts) and this Queen of NZ had made it clear that she wants house price to keep growing and is doing anything and everything with support from Mr Orr, so what else does one expect.
Since yesterday media too has been asking her questions but has any media or journalist approach her for her response on 10% monthly growth - NO. Media too is dominated by Marks and Mikes but am surprised that Jenee has not raised it - in fact should not just questions her which she can easily deflect as Jacinda Arden now is an expert on avoiding, lying and manipulation so should not just ask question but should grill her.
She was shouting on top of her voice when was happening under National ( now on hindsight was not as bad) but she has taken it to a different level and she too now is in denial mode or trying to avoid and if forced to face the camera - manipulates with lie.
Would be interesting to see her response with straight face and than immediately divert to NEXT question, please or come with excuse of waiting for advise or.........
But look over there!... It's Judith Collins!!
Oh and look over there, Clarke caught a fish. Nothing to see here.
Of FHBs the Queen has just announced: "Let them eat cake."
Still waiting on the much publicised announcement on the government’s demand and supply side measures. They have already made 3 announcements about this much awaited announcement. Wonder if they will make 2 more announcements that they are still thinking about it. It’s mid March already, it has just been promised since November. Holding my breath, anyday now.
No surprise, Upper Hutt is paradise...
Jewel of the South Pacific
Why does NZ need a Rarotonga travel bubble when we've got Upper Hutt...
Upper Hutt is a cut above certain parts of Lower Hutt, Porirua
Its a s@&thole
It's Upper Class, it is in the upper echelons of NZ suburbs
LOL. Rates are very high. Carterton is also very high.
Lets tip another $100 billion into the economy and see if we can double them in a year.
Excellent returns : Million dollar house with 20% deposit of $200000 is now approx 1.4 million so on an investment of $200000 gets a return of $400000 - why should anyone put money in business or anywhere else where one is getting 200% return on investment (triple your money) and that too supported by government who have more to lose if it stops than the individual who is investing.
Pyramid Ponzi scheme supported by Jacinda Arden government and no word from her.
You cant taper a ponzi (or a boomer)
ROLL, ROLL UP. Get your free money now with our gold plated government guaranteed plan. Just sign here for our easy 30 year payment plan.
https://www.howestreet.com/2021/01/the-biggest-housing-bubbles-of-all-t…
Seriously. You could not make this stuff up.
Jacinda Arden will be so proud that NZ is leading the chart among other countries in housing bubble.
Still no comment from her or her knights.
Near the top of the world on housing unaffordability and rates of child poverty.
Doing such sterling work, Jacinda!!!!
Upper hutt - no idea but guessing based on population around 100 sales in an average month, maybe less ?
So 100 stupid people make the market price . . .
Is it hard to believe Upper Hutt has a few hundred stupid people earning a salary in Welly, looking to buy an IP to jump on the gravy train ?
Actually just checked - January 30 sales, Feb 71 - tiny sample sizes get big swings even if its an index.
Lets get some listings from Labour and rbnz having a shake of the tree this month, get some volume in sales, then we might get a better gauge of market value of property.
I'll put it out their right now for people to check - Upper Hutt march 2021 HPI to fall from February 2021 (will still up 20-30% on march last year though), this about data more than house value.
It's just natural that crappiest areas boom in the wake of the better areas, as many people get priced out of the better areas.
It is all to do with a lack of supply, if someone needs to buy, as most are being sold as multioffer, tender,etc. So people have to submit their highest price they are willing to pay by a certain date. You only need one to pay one of the high estimated prices from these estimation websites. The problem is that people don't think that prices could drop. They dropped in Wellington in the 90's, as did GVs
They also dropped a bit in the early 2000s
Wasn't this data already published yesterday? What's the need to highlight it again from a journalism perspective other than creating FOMO when another entry was published already?
Frenzy buying needed to support the pyramid and only possible by adding to FOMO as rational thinking has been over taken by greed.
Well, it is going to be hard to support the rush of FHB and investors from February before the reintroduction of LVR restrictions, banks have been busy as hell during the past month, way more than the previous two since they started imposing "their own ones", so good luck to spruikers with that.
It's consistently necessary to punch FHBs in the face. IN. THE. FACE.
It's interesting to me that Queenstown prices have managed to climb at all, local businesses themselves seem to indicate they are getting ready to wind down:
https://www.rnz.co.nz/news/business/438184/third-of-queenstown-business…
It must be out of towners scooping up houses because I'd think banks might be hesitant to lend in that market?
The only demand driver that would make any sense would be well-paid professionals from other cities deciding they'll move to pretty Queenstown if they're allowed to WFH.
I really doubt that's a significant factor, more likely it's just part of the general mania.
This is what motivated me to buy my first home in the Wairarapa 3 years ago. I can commute to the office in Wellington by train, while having flexibility to work from home, and not paying through the nose for a house.
Prices on fire in the 'rapa. Still a cheaper option, but heading towards Wellington 3 years ago prices now.
220% in 3 years. A relative is building a brand new 3 bedroom 2 bathroom house in Rolleston, albeit on a 400m2 section, for less than the midrange Corelogic valuation of our 1980s Keith Hay 80 sqm home on 800 sqm. Sure, half the land but 1/4 the distance to the jobs.
Herd mentality does not follow rational behaviou. Best analogy is people fighting over toilet paper.
Now toilet paper has replaced houses and if it ever stops will be disaster but hopefully RBNZ and Government will support as now entire country is linked to housing ponzi - Thanks to...
It's interesting to me that Queenstown prices have managed to climb at all, local businesses themselves seem to indicate they are getting ready to wind down:
I find it really annoying that people seem to think that when the Trans-Tasman bubble begins, Aussies are going to flock to QT in droves. Yes, I suspect some Aussies will go there for a getaway, but there is no indication that the traffic will be the same as before. Now I could very well be wrong, and it could be that because of the limitations on global movements, more Aussies will go to QT than ever before. Who knows. However, the reality is that 70% of Aussie h'holds have <$50k in cash savings. Take a family of 4 to QT and you could easily wipe out 40% of those savings. Is it realistic to expect this to happen?
Also what happens to this bubble if there's another community outbreak of Covid?
Sugar daddy Adrian prints some more money and pumps it into house prices of course!
Is the trans-Tasman bubble actually going to happen? Yesterday Australia announced they'd resume normal border operations in October this year.
I think New Zealands Covid-19 vaccination plan stretches into for most of this year with the New Zealand Government talking about normal border operation starting in 2022.
That window of opportunity seems to have passed largely.
Squishy
While Queenstown has seen a downturn in tourism and associated businesses the reality is that there is a lot of very serious monied in Queenstown who will not be affected by the downturn and in terms of asset inflation are doing very nicely. Likewise, quite likely those moving in are in the same situation - nothing like leveraging of one’s inflated property/home and ultra low interest rates to make that long planned Queenstown purchase.
In Queenstown just prior to Christmas and the tourist centred CBD was dead, but in the acres of car park at the 5mile shopping centre where the locals shop it was difficult finding a park.
Yes, Queenstown would have lost a number of low paid high proportion overseas workers in tourism but in terms of rentals there was considerable demand and common for local workers to commute from the likes of Cromwell an hours drive away. I expect that quite possibly they would be fairly pleased to see cheaper houses and rental accommodation coming up and making a move.
Good points, agree
The salaries of the elected officials and unelected reserve bankers should be reduced by the annual house price inflation index.
I think you have that the wrong way around?
"The salaries of the elected officials and unelected reserve bankers are directly correlated to the increase in house prices."
What do we expect to happen?!
Realistically, for most New Zealanders, the appreciation in property prices ('wealth effect') vastly exceeds their regular income from wages. If people had to survive off just their wages...well they'd be as poor as the renter classes.
To figure out if the market has peaked ask a simple question - Can enthusiasm be increased further from here ?
Are there still bears sitting on the sideline to add to the demand side ? The market turns once the last, most stubborn bear buys.
Economists have got this horribly wrong once again - we are in for a bumpy 15% drop (more in some parts) mainly due to how much over-extension the market has had based on emotion and low sales volume which is not sustainable - sleepy multi-property owners will not hesitate to offload rubbish that has 50-100k plus of overdue maintenance deferred.
Agree Simon but it may be better for government to controll it so can have induced coma to prevent disaster which is inevitable as government can delay but not avoid and now delay means will hit them most before election - but I guess they too knows and happy with two terms as have secured their future for life.
Govt and rbnz has fired it shots - If sentiment changes on a dime (which it can do even though nothing fundamental has changed) a mass of people wanting to sell houses and no one wanting to buy them is not something the govt or rbnz has any control over. Their chance to control was on the way up and they were asleep at the wheel.
The opening up of borders could be that turning on a dime - those who have high house prices who dreamed of living overseas and now have the money to do so by just selling and those young ones who feel they have been locked out forever ( keep in mind you cna still buy a decent 4 x 2 house in Perth and Brisbane for under 600K )may take the opportunity to leave.
On the other side migrants may decide to make NZ their new home - but for many the 12 month wait to buy an house in one of the highest price housing markets may not be the migrant dream they were looking for - other countries who also rely on migrants for economic growth may be a more attractive proposition.
If more people leave NZ than arrive ( similar to 2010-2014) then all of a sudden the demand/ supply equation will change dramatically
Good points and questions.
I wonder how many English people might genuinely think of returning to England. Selling their Auckland property and exchanging the proceeds into pounds could get them far in England, or maybe Spain...
Do you read the articles mate?
In all the frenzied talk about Auckland's $100K jump in a month no one seems to have looked at the Wellington graph in the linked article, which also shows a $100K jump. Then again, then Auckland graph shows a $105K jump.
Wellington increase is even larger than Auckland's on a percentage basis, which may not be exciting if it was a smaller region like the West Coast (50% of not much is only a bit more than not much) but it was coming from a $790K base to start with.
While I'm doing very well out of this run in terms of on-paper wealth I've been feeling very...guilty?...about the value given to our house that is really nothing special. A fallback of 20% or so wouldn't harm me financially but it would certainly help FHBs, as well as my children when they look to buy in a few years.
It's a game of economic Jenga and I agree it's going to end badly sooner or later.
Adrian Orr has neglected his mandate for financial stability.
The self interest in me would like to see these paper gains continue, but the schadenfreude in me would like to see it come crashing down. We'll be fine having gone from 25% to 70% equity in 3 years of ownership, purchasing near to the 2007 price the vendor paid.
With his prophesy of house prices (only) doubling every ten years we might have to start referring to Ashely Church as a DGM.
F me, and I thought Bitcoin was lucrative. No wonder half the developing world wants into NZ.
Meanwhile ..... GR is still thinking about what to do.
Thinking about what to say to make it look like he has any clue about what to do... a riddle he appears stuck on.
You only have to service the debt
https://www.youtube.com/watch?v=DyaitC91hEM
This makes perfect sense. Everyone on Earth is desperate to live in Upper Hutt.
Every time I drive through Upper Hutt it feels eerie though. There's something about the fog and the cold air there.
It's so exotic.
Not all hope is lost
FHBs who are currently locked out of the housing market due to marginally insufficient deposits should deploy a new strategy to get on the ladder.
The micro-strategy that can be used are known as reverse flow acquisition. Whilst many FHBs are fixated on standalone houses to get on the ladder in order to fulfil their Kiwi dreams, they become blind sided by what else is available in other segments of the property market.
FHBs are beginning to look at town houses as their first choice attempt at getting on to the ladder. What is currently overlooked are the apartments that the media had wrote down due to the pandemic. This puts a transient price pressure on apartments that would in normal times be sold for much more.
FHBs should size this opportunity to enter the market through apartments. As the potential for upside is greater in this segment due to the easing of the pandemic situation, FHBs who adopt this strategy could see an accelerated growth in their equity which will eventually be substantial enough for them to upgrade along and towards their dream home.
Another advantage of reverse flow buying is that you get to avoid the crowd and competition which means better value for your hard earned money.
Be quick though before other FHBs caught on to this- this may be your last chance!
For investors who currently have sufficient cashflow and leveraging capacities, they should be looking at acquiring properties located at popular tourist zones. With vaccinations ramping up, the pandemic situation beginning to ease and the pent up urge to travel, there is great potential for a tourism boom. Any turnaround will see a asymmetrical upside in favour of the investor.
Just like the above mentioned micro strategy, there is a price pressure on holiday homes as the market is overly focused on housing in the capital cities. This presents a bargain not seen in normal times which is coming round the corner. Investors will need to assess their financial capacities and be decisive- this opportunity won't last long.
For both FHBs and investors, opportunities don't present themselves often, they are taken by a prepared mind.
In no universe whatsoever are NZ houses worth the insane amounts for which they've been selling these past couple decades. They just aren't. That's the crux of the matter. NZ houses are worth barely a small fraction of current valuations. It doesn't matter how much the bubble boosters try to pretend they're actually worth squillions. NZ residential property is grotesquely overpriced to an almost comical degree. Fact.
I guess you must have a few apartments for sale, and a few more coming live in the next few days/months.
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