The Real Estate Institute of New Zealand has reported what many expected, that the housing hot-streak is far from over, with national median selling price increasing by $50,000 from January, while Auckland’s median price was up $100,000 for the month.
That’s an average price increase of $25,000 a week for the country’s most expensive housing region. Residential property sales volumes were also through the roof, hitting a 14 year high for the month of February.
Prices weren’t the only record breaking in February, national house sales also hit new strides with 7964 residential properties sold throughout the country last month, up 14.6% compared to February last year. The Auckland market led the charge with 2775 sales in February, up 34.6% year-on-year. That’s also the highest sales volumes for the month of February in 14 years.
Auckland’s largest real estate agency, Barfoot & Thompson also reported record breaking numbers for February, with the highest sales volumes in 17 years. The agency sold 1124 residential properties in February, up 40% on the 804 it sold in February last year. The was the highest number of homes the agency has sold in the month of February since 2004.
REINZ Chief Executive Bindi Norwell Stated that the looming LVR restrictions could be a major factor in these record breaking numbers, “It’s highly likely that some of this uplift can be attributed to both investors and owner-occupiers looking to purchase ahead of loan-to-value ratio restrictions coming back into effect in March”
Prices also rocketed up, with the national median selling price increasing by $50,000 in February, setting a a new record of $780,000. In Auckland the median price increased by $100,000 in February, to set a new record of $1,100,000.
This broke the previous record of $1,005,000 set in December last year and up $190,000 (+23%) compared to February last year.
“It’s likely that February’s housing data will make very difficult reading for the thousands of renters and first home buyers who are hoping to one day be able to purchase a property,” Norwell said.
Barfoot & Thompson Managing Director Peter Thompson stated that the company will now be anticipating a cracker month in March, which is traditionally the busiest month of the year for the residential property market, “The market is now set to remain active throughout autumn.”
Bond yields going up in many parts of the World, longer term interest rates are tipped to rise. With LVR restrictions coming into effect for Property Investors and potential interest rates increases, it remains to be seen if these will have cooling effect on Property prices.
-by Ravi Mehta from Professional Financial Solutions