Canterbury house prices beat national rise
Canterbury house and rental prices are well ahead of national levels, new inflation figures show.
Statistics New Zealand figures out today show prices for new houses in Canterbury jumped 9.5 per cent in the year to last month, well ahead of the national rise of 4.7 per cent.
Housing rentals rose 5.1 per cent in Canterbury, compared with a 2.1 per cent rise nationwide.
The rises were partly offset by lower prices nationally for electricity, down 0.4 per cent last year.
Inflation hit 1.6 per cent nationwide, with a 0.1 per cent rise in the December quarter.
Higher international airfares and rising housing and dairy prices were partly countered by lower vegetable prices and cheaper petrol.
The consensus among economists was for a 0.2 per cent drop in inflation in the December quarter, in line with the Reserve Bank's expectations. That would keep annual inflation at 1.4 per cent, well below the Reserve Bank's 2 per cent target.
The Reserve Bank is charged with maintaining inflation between 1 per cent and 3 per cent.
Financial markets were looking for clues that the Reserve Bank might increase the official cash rate from 2.5 per cent at the end of this month, which would result in higher mortgage rates.
They were giving a 40 per cent chance of a rise this month and saw the inflation data as a potential catalyst, Westpac senior economist Michael Gordon said before today's release.
Inflation typically falls in the last three months of the year because of seasonal price reductions in particular for fruit and vegetables.
The food price index fell 1.4 per cent in the December quarter.