Median house prices in the Southland region have increased 17.4% from $315,000 in October 2019 to $370,000 in October 2020, according to the latest Real Estate Institute of New Zealand statistics.

Nationally, median prices have increased annually by 19.8%, with the median now at $725,000.

The Reserve Bank of New Zealand is now considering reinstating loan to value ratios on high-risk lending from March next year, after lifting them in May to encourage home buyers and bank lending.

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In Southland, sales volumes increased 23.2% year-on-year with 218 properties sold in October. 

The REINZ report says low interest rates and the lack of loan value ratios have continued to encourage all buyer groups, including investors and first home buyers.

This meant Southland open homes remained busy and properties in the $500,000 plus bracket have increased from 11.3% of sales in October 2019 to 20.2% of sales in October 2020, according to commentary by REINZ chief executive Bindi Norwell.

The REINZ house price index, which measures the changing value of property in the market, reached a new record in Southland in October, up 9.0% year-on-year, showing the ongoing increase in property value for the region, Ms Norwell said.

Nationally, the house price index also reached a new record of 13.5%.

Ms Norwell said October 2020 “will go down in ‘housing history’ as being the point in time when Auckland region’s median house price hit the million dollar mark for the first time – something no one anticipated or expected just six months after the entire country came out of lockdown.”  

All regions hit median house price records in October. 

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Ms Norwell said the statistics raised “serious questions around future affordability for Auckland residents wanting to get a foot on the property ladder’’. 

The data highlighted issues such as re-addressing Resource Management Act legislation to help support more houses being built at speed and at scale, she said.

The record median house prices also showed how low interest and mortgage rates, the diversion of spend on overseas travel to property, expats returning home, the removal of LVRs and a fiercely competitive market due to the lack of listings had been contributing to price rises over the past few months, she said.

“Given the price rises we’ve seen over the past few months, we wouldn’t be surprised if the Reserve Bank goes ahead with its proposal to reinstate LVRs before the 12-month period is up – particularly for investors,” Norwell said.

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SOUTHLAND AT A GLANCE

Gore median: October median $350,000, up from $272,000 in October 2019

Invercargill city median: October median $369,000, up from $325,000 in October 2019

Southland district media: October median $410,000, up from $325,000 in October 2019.