House prices have had their strongest lift in more than four years reflecting “underlying confidence coupled with strong economic fundamentals”, the Real Estate Institute (REINZ) says.

All regions captured by the REINZ house price index reached record highs in February with a year-on-year increase of 8.7 percent.

The national median house price rose 14.3 percent to $640,000 over the year from $560,000.

Regions with the largest median price rise included Manawatū/Wanganui at 17.5 percent, Marlborough at 16.2 percent, West Coast at 15.8 percent and Otago at 15.4 percent.

“February was a very buoyant month from a price perspective with median price rises the largest the country has seen in 53 months,” REINZ chief executive Bindi Norwell said.

“We will obviously be keeping a close eye on any impacts on the housing market as a result of Covid-19 and it will be interesting to see what decision the Reserve Bank makes on 25 March (in terms of the Reserve Bank’s) official cash rate.”

The number of houses sold in February were also the strongest in four years, with a rise of 9.2 percent.

“February saw mixed results across the country in terms of sales volumes, with some regions seeing their busiest February in a number of years and some seeing their quietest February in a number of years,” she said.

The regions with the biggest increase in house sales included Gisborne at 35.7 percent, Tasman at 17.5 percent, and Hawke’s Bay and Bay of Plenty near 12 percent.

“The overall uplift in sales volumes is a result of that underlying confidence that has been around for a few months now coupled with strong economic fundamentals.

“It’s too soon to see any effects from Covid-19 on sales volumes, however, this is something we’ll be keeping a close eye on over the coming months.”

This article was originally published on RNZ and re-published with permission.

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