Wellington house prices hit record high

Last updated 09:22 10/11/2012
Oriental Bay

The monthly gain in Wellington was stronger than the national average, which was up 1.5 per cent, the Real Estate Institute's Housing Price Index shows.

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House prices are rising in Wellington, Auckland and Christchurch, but the rest of the country is a mixed bag, according to latest market figures.

The Real Estate Institute's Housing Price Index out yesterday showed house prices up 3.3 per cent in Wellington in October, hitting a record high. The index for Wellington was up 3.5 per cent in the past year.

The monthly gain in Wellington was stronger than the national average which was up 1.5 per cent, but not as strong as the 6.9 per cent national gain for the year.

The Housing Price Index is seen as a more accurate indicator of price trends, averaging prices across common groups of homes. The index was developed in conjunction with the Reserve Bank.

Less reliable figures showed the median price in the Wellington region rose to $403,000 in October, up about $10,500 on the same month last year. Reinz said there were notable gains in central and northern Wellington suburbs, and the Wairarapa.

All regions saw a rise in sales volumes in October, with Wellington volumes up more than 27 per cent on the same month last year, after being flat for some time.

Days to sell in Wellington improved from 35 days in September to 30 days in October.

Nationally, Auckland again led the housing market field, with the Housing Price Index up 5.3 per cent in October, to be up a whopping 14.4 per cent in the year - also a new record level.

The median price in Auckland is now a record $530,000.

Earlier this week, new Reserve Bank governor Graeme Wheeler warned that households were still relatively highly indebted and house prices remained "over-valued" on some measures. That meant banks would need to remain alert to the risks of a big leap forward in householder credit growth, the central bank warned. Wheeler said housing affordability had worsened significantly since the 1990s. The latest figures add to that pressure on home buyers.

Economists believe Auckland's hot property market is beginning to filter down to other regions, after a bumper month of house sales last month.

ANZ senior economist Mark Smith said the Reserve Bank would be hoping the housing market would not "get up a head of steam" and flow through to consumer spending.

However, a shock rise in unemployment this week might stomp out the sparks of a broader property recovery, he said.

Reinz figures show the national median price hit a new record in October of $380,000, up 5.8 per cent on a year ago.

Economists said Auckland's housing shortage, low mortgage rates and greater bank competition were behind the rise.

However, estate agents and valuers say vendors have been slow to act this spring and a lack of listings is still a problem.

Low stocks were "creating considerable pricing tensions" and also shortening their time on the market, Smith noted.

The number of days to sell a property dropped to 32 days, one day shorter than September and three days less than a year ago.

Reinz chief executive Helen O'Sullivan said Auckland was still the most buoyant market, "with strong growth in the number of sales, increases in the median price and falls in the number of days to sell".

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- The Dominion Post


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