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House prices reach new records

Published: 12:18PM Tuesday January 15, 2013 Source: ONE News/Fairfax

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% 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% 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% 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% from December 2011.

Canterbury/Westland's median house price rose 1.7% 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%, followed by Central Otago Lakes, up 5.9%, and Taranaki, up 5.4%.

Hawke's Bay prices eased by 7.9% in December, Southland by 5.1%, and Otago by 4.1%.

Wellington was subdued at 0.6% growth, though the capital city's median house price has grown 5.3% 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.

Slim pickings for first home buyers in Christchurch

Finding an affordable house unscathed by the Canterbury earthquakes is proving to be a challenge for first time home owners in Christchurch.

The median house price in Christchurch has inflated from $346,000 to $379,000 over the past 12 months.

The increase is even more daunting for buyers considering the number of quake-damaged homes up for sale, which are dragging the median price down.

"The biggest issue at the moment is lack of supply, there's not a lot of homes," said Real Estate Institute New Zealand director Tony McPherson.

"There are a few starting to come onto the market in the early part of January."

Prospective home buyers Rowan and Karine Das said finding their first home had been a "disheartening" experience.

"We would often look at houses that were listed in our price range and they would end up going for almost $40,000 over that amount," said Karine.

Real estate agents told ONE News homes are selling quickly in the seller's market.

"This is my 32nd year in the real estate industry and we're now selling our properties within 28 days of being listed which is the quickest time I've known in my career in real estate," said Harcourts' grenadier Rob McCormack.