Market buoyancy begins to lift

Otago has joined Auckland and Christchurch in booking record median house prices for November, as market buoyancy shows signs of spreading.

While median house prices are up, many values around the country are flat or in slight decline.

Westpac chief economist Dominick Stephens said housing turnover nationally, underpinned by low interest rates and improving household confidence, had picked up ''steadily'' during the past year, with house sales ''surging'' 18% during October.

Real Estate Institute of New Zealand (REINZ) data revealed overall sales up 24% over the past year, with more than 7450 houses sold, worth $3.6 billion, during November.

''Demand continues to outstrip supply and is placing upward pressure on house prices,'' Mr Stephens said in a statement.

For most of the past 18 months, Auckland and Canterbury had led sales, but other regions were beginning to close the gap.

''And turnover is now rising in many regions of New Zealand, although some pockets or weakness do remain,'' Mr Stephens said.

Agency Quotable Value data was released separately yesterday showing the increase in values nationally continued to be driven by Auckland and Canterbury, while around the rest of the country values have been steady or increasing only slightly over the past six months.

Nationally, values were up 1.9% over the past quarter, 5.7% over the past year and 1.5% above the previous market peak of late 2007.

Research director for QV Jonno Ingerson said outside Auckland and Canterbury the property market remained subdued as buyers were generally cautious, and there were few quality properties on the market to choose from.

Dunedin house values remained ''stable'', up 1.2% during the past three months and up 3.7% during the past year, with Queenstown Lakes one of three regions in decline for the quarter, down 0.4%.

The REINZ data said median November house prices reached new highs in Auckland, at $540,000, in Otago, at $258,000, and Canterbury/Westland, at $345,000.

A record national median sales price of $383,250 was posted for November.

REINZ said all regions recorded increases in sales volume compared with November last year, with Central Otago Lakes up 45.9%, followed by Otago up 38.7% and Auckland up 28.9%.

ASB economist Jane Turner said price increases in other areas beyond Auckland and Christchurch were ''much more modest'', but the trend suggested the housing market pick-up was broadening to other regions of the country.

simon.hartley@odt.co.nz

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