House prices on rise in Nelson-Tasman

Last updated 13:00 12/02/2013

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House prices in Nelson and Tasman continue to rise at a modest rate, despite a national trend towards stability in provincial areas.

Nelson's prices have risen by 2 per cent over the last three months, while houses in the Tasman region are up by 1 per cent.

The average value of a house in Nelson is $391,051, while the comparable figure for Tasman is $397,650.

Quotable Value research director Jonno Ingerson said property values were increasing nationwide. This was no longer solely driven by Auckland and Canterbury, with provincial centres getting a boost over the last month or two.

"While the rate of value increase is not as fast as Auckland and Canterbury it does signal an increase in confidence across most of the country," Mr Ingerson said.

QV's latest report indicates Nelson's rise in property values is higher than many other provincial centres, most of which have seen increases of around 1-1.5 per cent during the last three months.

Central Hawke's Bay also saw a sharper rise, with average house prices increasing by 2.9 per cent.

Nationally, house prices are up 1.5 per cent since November, showing a rise of 6.2 per cent since this time last year. Average prices are still 2.6 per cent higher than the market peak change in 2007.

Economists said the rises in Auckland and Christchurch were driven by a shortage of supply, supported by low mortgage interest rates.

Infometrics managing director Gareth Kiernan said house prices in Wellington were flat.

"It comes back to the tightness in government spending and the difficulty that's placing on the regional economy. I don't see that changing in the next couple of years," Mr Kiernan said.

Bank of New Zealand chief economist Tony Alexander said house prices were rising in Auckland because of the supply shortages, rather than low interest rates.

In Auckland, not enough homes were built during the 2000s leaving a shortage which would only get worse.

Mr Alexander said there was a coming shortage of workers to build homes, with few apprentices signed on in recent years, older builders retiring, and many workers moving to Christchurch to help in the rebuild.

Prices were already rising fast in Auckland when the country was losing more people than numbers arriving long-term. New Zealand would soon move to modest net migration gains.

Given this, the Auckland market was not over-valued. "I don't think there is a bubble in the market."

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- The Nelson Mail

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