Buyers looking to purchase a house in the Auckland region can expect to pay over $1 million, according to QV’s latest House Price Index released today.
The Auckland market has seen a 15.9% hike year on year and 6.1% over the past three months, the data shows, with values now sitting 85.5% higher than the previous peak of 2007.
The average value for a house in Auckland is now $1,013,632.
Economist Shamubeel Eaqub was not surprised by the milestone, according to the NZ Herald.
"The interesting thing now is whether or not it becomes a psychological barrier. The Auckland housing market is extraordinarily unaffordable," he said.
He calculated that if Aucklanders saved 10% of their income for a deposit and then paid off a mortgage at a third of their income, they could expect to be mortgage free after 70 years.
Although average house prices have reached a new milestone, QV national spokesperson Andrea Rush said there is indications activity may be cooling.
“There was a strong surge of activity in June and July however it now appears the new LVR restrictions for investors adopted by banks towards the end of July have started to have an impact in the housing markets in Auckland, Tauranga and Hamilton during August.
“In recent weeks there has been a drop off in market valuation requests, auction clearance rates, open home attendees and loan application rates in these centres.”
QV general manager Jan O’Donoghue added, “We saw a similar trend about this time last year when new LVR’s of a 30% deposit were announced for investors in the Auckland region.
“So it’s most likely this change in the market is being caused by the latest LVR restrictions requiring a 40% deposit by investors as well as the continued lack of stock listed for sale in the market.
“However, a shortage of listings and lower sales volumes do not seem to have impacted on value growth as yet they are still increasing.”