$389,000 to buy an average house

House prices have reached new heights, with the median price for a Kiwi home $389,000 - but to buy your dream home for that amount, you may need to move to Oamaru.

Latest data from the Real Estate Institute shows the national median house price reached a record $389,000 last month, up almost 10 per cent from the previous year.

But value for that asking price varies widely around New Zealand, with the same budget yielding a two-bedroom unit in Auckland's Mt Eden or a five-bedroom, two-bathroom home on a quarter-acre section in Oamaru.

And Wellington buyers looking to live in the central city will have "very little" to choose from at that price, a real estate agent warns.

The institute figures, issued yesterday, showed 74,000 houses were sold in 2012 - a 21 per cent rise from 2011 and the highest annual total since 2007.

Institute chief executive Helen O'Sullivan said the Auckland and Canterbury/Westland regions were the key drivers last year, accounting for more than half the 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."

Wellington's market remained subdued, with just 0.6 per cent growth, but house prices continued to rise, with the region's median price reaching $407,500 last month.

That was 5.3 per cent up from 2011 - with prices steadily climbing about $2000 each month in the last quarter of 2012.

"We're not expecting it to take off like it has in Auckland," said the institute's Wellington spokesman, Euon Murrell.

"Wellington has always been steady and consistent and we hope that will be maintained."

Mr Murrell, a Tommy's real estate agent, said there had been positive signs in the January market so far.

"Things are happening, so at this stage it is an indication there is a lift out there.

"In general there is an increase in the number of people coming to open homes."

Homes in the eastern suburbs, such as Miramar, and central city fringe areas appeared the most popular with buyers.

But RE/MAX Wellington manager Stephen Platt said while $389,000 may be affordable - with many buyers in that price range at the moment - choice would be limited in Wellington.

That price would buy a "reasonable-quality three-bedroom home in the Johnsonville or Newlands area - basic without being stunning".

In the more popular central and eastern suburbs "you might get a townhouse, but you'd struggle", he said.

Property listings on Trade Me also showed a wide variation in options at that price.

Suburbs such as Seatoun had no houses listed in the $100,000 to $400,000 category, while a two-bedroom unit in Miramar compares with a three-bedroom, two-bathroom home in Upper Hutt.

New Zealand's rural areas provided the best value, with a five-bedroom property in Oamaru and a four-bedroom Milton home on an 8094-square-metre section available for the same price.

Professor Bob Hargreaves, of Massey University's real estate analysis unit, said while strong competitive markets in Auckland and Christchurch had made housing less affordable in those markets, across the rest of the country competitive interest rates were working in buyers' favour.

The regions with the highest December price lift were Nelson/Marlborough, up 8.3 per cent, Central Otago Lakes, 5.9 per cent, and Taranaki, 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.

Across the whole country the total value of residential sales was $2.73 billion in December, up from $2.32b in December 2011. The total value of residential sales for all of 2012 was $33.95b.

The Dominion Post