Revealed: Where houses earned more than the average Kiwi

Last year the average Kiwi earned $64,700.

In some parts of New Zealand, houses earned nearly double that. In just 12 months, median house values in the Bay of Plenty went up by $103,000 and in Hawke's Bay by $100,000.

Nationwide, the median price of a house went up by $65,000 – the same as the average wage. It now sits at $615,000. In Auckland the median grew by $70,000 to $875,000, while the rest of the country went up $55,000 to $525,000.

The data from the Real Estate Institute of New Zealand (REINZ) comes with its announcement that the number of properties sold nationally in January was the highest in four years. This year 4603 houses sold, up 3.2 per cent or 144 more than January last year, with Auckland volumes up 9.7 per cent on last January.

Seven regions saw new record median prices, including the Bay of Plenty where median prices have broken the $600,000 barrier, up a whopping $103,000 on last year.

Median prices in Waikato are just nudging that mark, at $599,000, but that’s off a more modest $49,000 growth in the year.

Other regions that earned more than the average wage include Hawke's Bay (up $100,000 to $550,000), Otago up $95,000 to $570,000, Manawatu/Whanganui up $81,000 to $411,000 and Southland, up $80,000 to $359,000.

Overall REINZ says their house price index rose 7 per cent on January last year.

Westpac’s Chief Economist Dominick Stephens, who predicted this figure last year, says that the bank is now expecting house price inflation to reach 10 per cent by mid-year. But it won’t be the boom of four years ago.

“We are not expecting a repeat of 2016,” he says.

“We predict that the pace of house price inflation will soon start easing off as rising fixed mortgage rates gradually crimp the market.”

REINZ chief executive Bindi Norwell says that the stronger than normal start to the year was driven by increasing confidence in the housing market.

“That’s been underpinned by a relatively strong economy, good employment rates and the low interest rate environment,” she says.

“[The] increases in the median house price reflect the sustained pattern we’ve seen over the last year or so where the shortage of housing stock coupled with the increased urgency from buyers has been pushing prices up."

Stephens concurs, saying that the reduced interest rates and cancellation of capital gains tax have trumped what economists would expect from the usual supply and demand drivers of price (construction activity is up, net migration is down but house prices have still shot higher).

The rise in median sales prices is largely driven by higher sales volumes of the higher priced properties. Property sales of more than $1m were up by 200 to 6781, while sales between $750,000 and $1m were up 150. Sales under $500,000 were down to 1552, and are at the same volume now as sales between $500,000 and $750,000.

Norwell says that higher sale volume, coupled with lower new listings coming to market meant that the total number of properties available for sale nationally decreased by 5430 on last January to 19,488 - the lowest level of inventory for a January since records began, albeit an improvement on December’s 18,230 house listings.

That drop was reflected across the entire country, with 2020 fewer properties for sale in Auckland. Properties took six fewer days to sell, down to 42 days across the country, 43 days in Auckland, andproperties in Gisborne selling in 27 days. Hawkes Bay, Taranaki and Manawatu/Whanganui had their record lowest number of days to sell since records began.