New house price record, regions flat

The house price divide between regional and main urban centres continues to grow.

Latest Real Estate Institute sales figures for December 2012 reveal a new record national median price of $389,000 – 9.6% ahead of December 2011.

But a closer look at regional sales data shows small town prices remain flat or declining compared to the areas of greatest demand, Auckland and Christchurch.

Canterbury/Westland’s property boom continues, with median house price last month rising 1.7% compared to the previous month to a record $351,000.

This trend in Canterbury is likely to continue as the deadline for red-zoned residents to quit properties looms mid-year.

Auckland’s median house price eased by $5000 to $535,000 ilast month compared to November 2012, but well up on $484,375 in December 2011.  

Smaller towns including Kaitia, Paihia, Thames, Rotorua, Taupo, Gisborne, Hastings, Motueka and Invercargill saw price declines.

During the whole of 2012 there were 74,000 house sales recorded by the institute, a 21% increase on the 2011 year and the highest since 2007.

Institute chief executive Helen O’Sullivan says the total number of sales remains below the long-run average and below the peak volume of 2003, when more than 120,000 residential properties were sold.

A feature of the 2012 market was the increase in sales achieved at auctions, especially in Auckland, where almost two of every five sales are now by auction. 

Nationally, there were 1102 dwellings sold by auction in December, representing 19.2% of all sales. 

c.hutch@clear.net.nz

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The banks, real estate agents and our politicians, most of whom have numerous rental properties, will be rubbing their hands with joy at this news.
Unfortunately, young people and those not fortunate enough to have their own properties are the big losers. The gap between the "haves" and "have nots" is increasing at a rate not seen in NZ before. Government policies ensure this. The free market will not fix the problem.
House price inflation is not included in the official figures, despite it being a family's largest cost. This makes a mockery of the inflation figures.

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Goodness, are you just a positive one. Have you any proof to your statement “the banks, real estate agents and our politicians, most of whom have numerous rental properties". Banks and politicians have numerous rental properties, huh?
We do live in the free market, and long may if continue. Young people can own houses. They just have to do like their parents did. Go without a few things to save the deposit, etc.

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To help close the gap, feel free to donate a large portion of your “have” to the "have nots".
That does not require government regulation or intervention. Or do you want more of my money to solve the problem?

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To put it on a simplistic basis:
If 10 properties are sold in the month for $1m each the average is $1m.
If 10 Properties are sold for $400k each the average is $400k.
Maybe the well-off are selling their properties rather than the less fortunate.
It is all a matter of conjecture or how well you understand the figures.
Most of the figures that come out are massaged to show a positive outlook for the real estate industry.

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This a direct result of the banking system awash with cheap credit via massive money printing creating bubbles. Wait until the tide turns.

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Agreed.

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Very hard to envisage an environment where interest rates will be substantially higher in the near to medium term. If rates do rise it will be on the back of high inflation numbers, which will, of course, result in strengthening real asset (ie, house) prices. The government is trying to help supply side by streamlining the RMA process which should help cheaper (and all) housing.

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The use of median house prices is only slightly more accurate than average house prices as a means to measure what is happening in the property market, so I wouldn't get overly excited about movements of $5000 or 1.7% as neither are very accurate. However, NZ's population is gravitating towards Auckland, which is driving the property market there to new highs. Work and an upgrade of facilities outside central Auckland is more likely to help than moaning.

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Wait for it... housing overheats in Auckland, the rest of the country pays when the grey men at RBNZ put up the interest rates and around we go again.

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Paul, you won't be suggesting regionally variant interest rates for mortgages, would you? Where if the property is in Wellington the rate is X%, if it is in Christchurch it is X-0.75%, and if it is in Auckland it is X+2.5%, for example.

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