House prices rise 8% in March, led by a 13% jump in Auckland

New Zealand residential property prices rose in March, led by Auckland where housing supply isn't meeting demand, putting pressure on the market.

Auckland's median house price jumped 13% to $720,000 in March, compared with the year-earlier month, outstripping an 8% rise in the national median price over the same period to $475,000, the Real Estate Institute said in a statement. Excluding Auckland, the national median price increased 1.4% to $350,000 compared with the year earlier, unchanged from February, the agency said.

"The movement in the national median price is almost entirely an Auckland effect," said REINZ chief executive Colleen Milne. "The underlying demand pressures remain and supply continues to be restrained by low numbers of new listings."

The Reserve Bank estimates Auckland has a shortfall of between 15,000 and 20,000 properties to meet population growth as the country experiences record migration. The bank, which says it is constrained from cutting interest rates because of concern it would further stimulate the housing market, is considering new restrictions for residential property investors amid concerns that rising house prices may pose a risk to financial stability. Reserve Bank deputy governor Grant Spencer may provide an update on the bank's thinking in a speech about housing to the Rotorua Chamber of Commerce tomorrow.

Some 8803 residential properties were sold in March, 20% ahead of the year earlier and the highest level since 2007, REINZ said.

Auckland March sales volumes increased 21% from the year earlier month and were 56% ahead of February, the agency said. Auckland had a record number of auction sales in March, accounting for 78% of sales, and had a spike in the number of house sales worth more than $1 million, which helped push up Auckland median prices, it said.

Houses took a median 32 days to sell last month, one day fewer than March last year.

The REINZ stratified housing price index, which strips out variations in the mix of high and low-values homes sold, rose 9.5% to a record 4340.9. The Auckland index gained 20% to a record, the Christchurch index rose 5% and the Wellington index advanced 3.8%.

(BusinessDesk)