Blowing Bubbles: Six charts that explain New Zealand's housing boom
Understanding house price increases can be complicated. Andy Fyers explains the key details via the medium of charts, as part of the 'Blowing Bubbles' series.
Since 2012 the value of the average house in New Zealand has increased from $402,000 to $622,000.
Most of this increase has been driven by prices in Auckland - which accounts for about 30 per cent of all the houses in New Zealand.
The average house value in our biggest city is now worth more than $1 million, up from $553,000 in 2012.
While the rate of increase in Auckland has tapered off slightly, there has been an acceleration in Hamilton, Tauranga, Queenstown, Wellington and other areas in the upper North Island in the past 12 to 18 months.
What's driving this increase in values?
Our population is booming thanks largely to a big increase in net migration (permanent arrivals minus permanent departures) in recent years.
When new people arrive many of them will want to buy houses, increasing demand and driving values up.
Add in record low interest rates, which make mortgages more affordable, and you've got a recipe for house price inflation.
The supply of new homes has not been able to keep pace with demand. While there has been an increase in new building consents, levels are still below where they were in 2003 and 2004.
But all good things must come to an end. The question is whether they flatten out, decrease slightly, or collapse outright.
The Reserve Bank's loan-to-value restrictions also appear to be having an impact on the number of mortgages issued.