Otago real estate statistics are not following the national
trend. Photo by Craig Baxter.
Residential house sales nationally grew by more than 20%
during 2012 and an acute supply and demand imbalance is likely
to keep pushing prices up, particularly in Christchurch and
However, while volumes and prices have been gathering pace,
the potential for a housing market bubble to begin reforming
appears to have eased, allaying the Reserve Bank's immediate
concerns. While the median national price hit a record
$389,000 for December, up almost 10% on the previous
December, prices around Otago increased only slightly to
$247,500, on declining volumes, Real Estate Institute of New
Zealand data released yesterday showed.
''Ongoing strong demand drove robust sales volume growth in
the residential property market during 2012, with the number
of sales up 21% on 2011 and at the highest level since
2007,'' REINZ chief executive Helen O'Sullivan said in a
There were 74,000 house sales during 2012 worth a total
Ms O'Sullivan said the record median price and strong sales
volumes for 2012 were likely to continue this year. However,
sales numbers were ''substantially'' below the 2003 peak,
when more than 130,000 properties were sold.
ASB senior economist, Jane Turner, said the figures suggested
the housing market had remained ''fairly steady'' during
''Encouragingly for the Reserve Bank, it appears the housing
market did not pick up any new momentum, having stabilised
over the past few months,'' she said yesterday.
Nonetheless, new house listings remained at very low levels
and the imbalance between supply and demand should continue
increases in house prices, mainly in Auckland and Canterbury
where supply constraints were the most acute, she said.
Auckland prices did record a dip during December, but that
followed strong growth during October and November.
''House listings data indicate new supply remains very low in
Auckland and this is likely to continue to place upward
pressure on house prices in the new year,'' Ms Turner said.
Canterbury prices were up 12% on year-ago levels, having
recorded strong growth over the past few months and supply
remained tight, she said.
In the Reserve Bank's December monetary policy statement, Ms
Turner said the bank commented it was comfortable with recent
housing market developments, particularly in the context
where credit demand remained subdued, but she cautioned
yesterday there were indications that credit demand had
started to pick up.
While reiterating earlier predictions the Reserve Bank would
keep the interest driving official cash rate at 2.5% until
December, she said the Reserve Bank would be ''watching
housing market and credit developments closely over the