Concern over house-price ‘frenzy’
Home sellers across the country were on average asking $89,575 more than they were when the first case of Covid-19 arrived in the country.
Asking prices were up on average 12.7 per cent across the country, according to property marketing website Realestate.co. nz. But in some places the rise was much higher, with the biggest rise of 32.2 per cent in the central North Island.
Vanessa Taylor, spokeswoman for realestate.co.nz, called the housing market ‘‘resilient’’, but affordable housing campaigner Hugh Pavletich called the property market out of control.
‘‘This is not resilience. It’s a completely out-of-control frenzy, which is extremely dangerous. and people need to consider really carefully before they expose themselves to it with excessive debt.’’
Taylor said a year on from Covid’s arrival in the country the housing market had defied early expectations of falling prices from economists.
‘‘The housing market has performed in a way that few people would have expected 12 months ago,’’ she said. ‘‘As we prepared for our first lockdown, economists were predicting a 5 per cent to 10 per cent drop in house prices, but what we’ve actually seen is quite the opposite.
‘‘Despite the social and economic impacts of Covid-19, the property market has stayed remarkably resilient. We’ve seen steady price increases in every region over the last 12 months.’’
Nationally, the average asking price for properties in February was $796,789, nearly 10 times the average annual after-tax income. realestate.co.nz
The average annual household income after tax was $86,626 in June last year, data from Stats NZ showed.
Pavletich predicted a flight of young disenchanted New Zealanders to Australia, homebuilding efforts outstripping New Zealand.
Taylor said low interest rates, a lack of housing supply, and a surge in returning New Zealanders were all factors behind the price rises in the past 12 months.
Seven regions posted 14-yearhighs for asking prices, possibly reflecting in part the ability of people to work remotely, a trend that had been accelerated by the Covid pandemic. They were Northland, Waikato, Hawke’s Bay, Central North Island, Wellington, Wairarapa and Manawatu¯Whanganui. where were
We’ve seen steady price increases in every region over the last 12 months.’’ Vanessa Taylor