House prices surge

Timages-2he average price for a three bedroom home in the old Auckland city boundaries now stands at over $1 million. Median house prices excluding Auckland were flat in March, but there was a 13pc jump in Auckland’s median house price. This mornings article in the NZ Herald reports Auckland house prices surged 13 per cent annually and are up $83,000, from $637,000 last March to $720,000 last month.

Anne Gibson Property editor of the NZ Herald reports the national March median was $475,000, up $35,000 or 8 per cent compared to March last year and an increase of $45,000 or 10.5 per cent from February Colleen Milne, REINZ chief executive, explained.

“March is the strongest sales month of the year, with almost 1400 more sales than for any of the past 12 months. While the increase in the number of sales is more or less spread across the country, the movement in the national median price is almost entirely an Auckland effect,” she said. “Auckland has posted a record number of auction sales in March, with almost one in two sales by auction. Our data shows that on a suburb-by-suburb basis auctions sell for a premium compared to other sales. We also see in the data a noticeable spike in the number of sales over $1 million in Auckland.

Prime Minister John Key acknowledged the rise in house prices in the city were unsustainable, but said there was no crisis. Read the full article on the RNZ site here.

PM Key’s comments came in a wide-ranging Morning Report interview on the state of the Auckland market.

“No, I don’t think you can call it a crisis. What you can say though is that Auckland house prices have been rising, and rising too quickly actually.” Mr Key effectively ruled out any changes in immigration policy to tackle price rises, indicating he favoured possible action by the Reserve Bank to make it tougher on property investors. “It might be an idea. I think those alternative tools in the toolbox are much better than blanket and wholesale rises of the interest rates which wouldn’t be justifiable given where inflation is at the moment.” The Prime Minister’s comments come as Auckland’s deputy mayor, Penny Hulse, called on political parties to agree on how to tackle the city’s housing shortage and escalating prices.

Listen to John Key on Morning Report ( 6 min 31 sec )