House prices rise in tight market
The property market continued to boil hotter at the end of last year, as house prices reached new records and sales volumes topped five-year highs.
Latest data from the Real Estate Institute of New Zealand (REINZ) shows the national median house price reached a new record of $389,000 in December, up almost 10 per cent from the previous year.
All regions recorded falls in sales volume during December, as is normal during the shortened trading month.
But 74,000 houses were sold over the course of the year, marking a 21 per cent rise from 2011 and the highest annual total since 2007.
Despite the strong growth in sales volume, the number of sales relative to total dwellings remained below the long-run average and well behind the 2003 peak, when more than 120,000 properties were sold.
REINZ chief executive Helen O'Sullivan said the Auckland and Canterbury/Westland regions were the key drivers last year, accounting for more than half the country's real estate activity.
"The strength of these two regions is starting to spill over into other parts of the country with Central Otago Lakes and Wellington both seeing more invigorated markets, particularly in terms of sales volumes."
Sales by auction went through the roof in 2012, growing by 87 per cent in Auckland and by one third across the rest of the country.
O'Sullivan said the trend was evidence of the ongoing tightness in some parts of market where demand was increasing, but supply remained constrained.
While the national median house price increased by $5750 in December, prices in Auckland eased by almost the same amount.
However, the median Auckland price of $535,000 was still up more than 10 per cent from December 2011.
Canterbury/Westland's median house price rose 1.7 per cent compared with November, reaching a new record of $351,000.
The regions with the highest lift in prices for the month were Nelson/Marlborough, up 8.3 per cent, followed by Central Otago Lakes, up 5.9 per cent, and Taranaki, up 5.4 per cent.
Hawke's Bay prices eased by 7.9 per cent in December, Southland by 5.1 per cent, and Otago by 4.1 per cent.
Wellington was subdued at 0.6 per cent growth, though the capital city's median house price has grown 5.3 per cent year-on-year.
Across the whole country, the total value of residential sales was $2.73 billion in December, compared with $2.32b in December 2011.
The total value of residential sales was $33.95b during 2012.