House prices rise to records nationally and in Auckland

House prices surged again in June. With special feature audio.

House prices nationally rose 14.2% in June from a year ago to a record $509,775, according to the Real Estate Institute’s stratified median house price index.

The index showed national prices rose 0.8% between May and June, with Auckland’s index rising 4.3% in the month to $988,120, also a record, although the annual increase in Auckland was slightly below the national rise at 13.6%.

In the North Island outside of Auckland, the annual increase was 22.7%.

Sales nationally fell 13.3% from May (2.6% in seasonally adjusted terms) but were 5.9% higher than in June last year – the annual increase in Wellington was more than 17% while sales in Canterbury were nearly 19% higher than in June last year.

“There is no holding the housing market back yet,” says ASB economist Kim Mundy.

“Days to sell remain at or near record levels and prices continue to hit record highs. Even a dip in seasonally-adjusted sales activity doesn’t seem to have constrained house price growth in June.

“The tightness of the housing market suggests  the fall in sales might have simply reflected a lack of houses available to buy.”

The institute says the number of properties available for sale across all regions of New Zealand has continued to fall.

Westpac’s acting chief economist Michael Gordon says that house price inflation “is running ahead of the Reserve Bank’s already strong forecasts.”

In contrast to the index, which removes distortions caused by a different composition of sales from month to month, the national median house price eased 1.2% in June but was up 11.1% on June last year.

The number of houses sold worth more than $1 million increased by a third compared with June last year while the proportion of homes sold for less than $600,000 fell from 66.4% to 60.6%.

The proportion of homes sold for less than $400,000 fell 6.1% from June last year.

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