The volume of house sales in the Central Otago Lakes area
were up more than 50% during October, while Queenstown
(above) prices declined more than 10% compared with a year
ago. Photo by Gerard O'Brien.
A surge of more than 30% in national house sales compared
with a year ago reflects more strengthening in the residential
house market - underpinned by big city sales - with economists
predicting more of the same.
However, mixed regional trends beyond the cities were
reflected in the Central Otago Lakes area being the largest
gainer in sales numbers at 54%, compared with October last
year, but that gain came at a cost to sub-region Queenstown
with a more than $58,000 decline in its median prices.
With the rebuilding in Canterbury forecast to boost
construction and sales, the Reserve Bank is not expected to
be overly concerned at the rising prices and volumes, for the
Nationally, the median house price hit a record of $380,000
while sales volumes on October last year rose 32.6%, or by
1633 homes, to 6640 unconditional sales in October. Auckland
booked a record $530,000 for its median price.
In Otago, the median house price rose 3.4% to $240,000, while
sales volumes on October last year rose 12.2%%, or by 28
homes, to 257 sales in October.
In the Central Otago Lakes area, encompassing Central Otago
and Queenstown, the median house price declined by $13,500,
or 3.2%, but sales volumes rose 54%, from 68 a year ago to
105 for October, only just ahead of Northland and Hawkes Bay.
ASB senior economist Jane Turner said the Real Estate
Institute of New Zealand house sales figures, released
yesterday, surged during October, lifting 16% month-on-month
and were 33% higher on levels in October a year ago.
Residential and section sales for October rose 46% from $2.15
billion in October a year ago to $3.15 billion last month,
while residential sales for the year to October stood at
Again, the rise in prices was led by Auckland, surging 5.3%
over the month to be 14% higher on year-ago levels,
Canterbury lifted firmly, up 1.4% over the month to be 7%
higher on year-ago levels, while Wellington prices were
starting to pick up; now 3.5% higher on levels of a year ago,
Ms Turner said.
REINZ chief executive Helen O'Sullivan said although sales
volumes rose across the country, prices did not automatically
"The market is very much in two parts - the metropolitan
regions of Auckland, Wellington and Christchurch [are] where
prices are rising, and the rest of the country where price
trends are mixed," she said in a statement.
Queenstown had sales rise from 33 a year ago to 45 now, but
prices dropped from a median $575,750 to $517,000 - a decline
of more than 10%, or $58,750.
Westpac chief economist Dominick Stephens said the
acceleration in house prices "may be stunning", but it was
not surprising, given the low interest rates.
"Mortgage rates have fallen very sharply, and as night
follows day, the housing market has responded," he said in a
If the profile of surging house sales is an indicator, the
bout of house inflation is about to "radiate out of Auckland"
to other regions around the the country, he said.
The rise in demand for housing was at odds with this week's
surprisingly weak employment figures, which would have
typically weighed heavy on household confidence and housing
demand, Ms Turner said.
The Reserve Bank appeared "relatively relaxed" about the
housing activity and it also expected an increase in new
housing construction during the year would help ease
pressures, she said.
However, the Reserve Bank, in its recent financial stability
review, noted some concerns about the recent increase in
prices, in that rises could heighten the risk of a sharp
downward price correction in the future, she said.