House prices across the Southland region rose almost 22% year-on-year, reaching $450,000.

All three areas - Southland District, Invercargill City and Gore District - saw substantial increases, according to the monthly figures from the Real Estate Institute of New Zealand (REINZ), released today.

The figures show the median prices of the 145 residential properties that sold across the region October 2021, compared to the median of the 220 that sold in October 2020.

Southland District reached a record high of $510,000, up 24.4%. There were 26 sales in the month, down from 37.

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Invercargill City was up to $435,250, an increase of 18%. There were 99 sales there, down from 156.

And Gore District reached $400,000 median price, up 14.3%. There were 20 sales there, down from 27.

REINZ CEO Jen Baird says October was not as busy as it would normally be in the Southland region's housing market.

"This is largely due to the Covid-19 restrictions delaying the usual spring flurry," she says.

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"The lower level of stock is allowing prices to keep rising.

"This October, first home buyers were more prevalent in the market but still not as many as there were this time last year.

"Over the next few months, the housing market should remain steady and start to increase in activity once alert levels ease all around the country."

Nationally, median prices for residential property increased by 23.4% to $895,000 in October 2021 compared to $725,000 in October 2020.

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"The same factors continue to drive price increases — supply, demand and relatively low interest rates," REINZ CEO Jen Baird says.

"There is also a sense of FOMO driving buyers for now."

Government measures to temper investor demand and recent moves by the Reserve Bank to increase OCR are causing headwinds for house prices, says.

"However, the long-term impacts are yet to be seen. We saw the initial lockdown impact on the market in August and September, with market activity slowing. However, October data announces the arrival of spring activity."

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The number of residential property sales across New Zealand decreased by 21.7% year-on-year, from 9,185 in October 2020 to 7,190 in October 2021.

However, there was a significant increase in sales month-on-month — up 30.3% from September (5,518).

And the value of houses continues to rise, according to the REINZ House Price Index (HPI), which uses different metrics to work out value, rather than media price.

It showed an increase of 29.9% year-on-year to 4,206 HPI points – reaching a new high on the index. This is the 15th consecutive month there has been a new high.