For the sixth month in a row, February saw the average asking price for a property in New Zealand hit a new all-time high - up more than $100,000 over the last year.
The latest figures from Trade Me Property show the average asking price for a Kiwi house rose to $784,450 in February, up $106,550 - a 15.7 percent jump on the same month in 2020.
Back in February and March 2020, as COVID-19 decimated the global economy and threw countries like New Zealand into lockdowns, economists expected house prices to fall.
But they did anything but, with the combination of record-low interest rates, the removal of loan-to-value ratio restrictions, an influx of Kiwis returning home and the lack of supply instead seeing values skyrocket.
The record increases prompted the Government last week to announce a range of measures intended to dampen investors' demand, including by removing interest deductibility and extending the bright-line test.
While Trade Me's data shows demand was down 2 percent nationally year-on-year in February, supply dropped 15 percent.
"Despite both supply and demand showing a drop-off when compared with the same month last year, demand continued to outstrip supply in February, pushing prices up," said TradeMe Property sales director Gavin Lloyd.
"While it's not totally clear yet what impact the Government's housing package will have, we may see some increase in supply as investors rethink their property-buying decisions with the bright-line test being extended and an increase in tax costs.
"In saying that, we would have to see a pretty remarkable increase in supply to see any relief in the short-term. We expect to see the impact of this new legislation later in the year."
Thirteen regions saw record-high average asking prices in February, with Auckland and the West Coast the only regions not to. That's the most record highs in a single month, according to Trade Me, showing "just how hot New Zealand's property market is".
Gisborne recorded the largest annual increase, up 31.4 percent over the last year, followed by Manawatū-Whanganui (21.9 percent) and Wellington (16.7 percent). The smallest increase was in Canterbury, up 6.4 percent, while Auckland rose 8.2 percent to an average price of $1,014,800.
Lloyd said Northland had a "standout month" in February, reaching into the $700,000 bracket for the first time ever.
However, Northland has also seen the largest drop in supply, down 35 percent year-on-year. Bay of Plenty's supply is down 34 percent and Nelson/Tasman dropped 13 percent.
"This had a direct impact on prices, with all three of these regions seeing average asking prices increase by at least 10 percent."
But even those with some lift in supply - such as Otago and Auckland - saw price increases due to "extremely high demand".
The Government's package of measures last week are intended to tilt the playing field towards first-home buyers who are increasingly locked out of the market by the rising prices. CoreLogic data found that in January and February 41 percent of sales went to investors.
