Otago house prices reach record highs

Liz Nidd
Liz Nidd
Record median house prices were struck in Dunedin, Queenstown and Clutha during July, as demand continued to outstrip supply in the South.

The number of houses sold was either flat or down in the three southern centres, and Otago volumes overall were down 4.4% from 293 homes sold last year to 280.

All regions, except Auckland booked price gains, but volumes sold remained flat against last year in many regions, data released yesterday by the Real Estate Institute of New Zealand said.

Both Dunedin and Queenstown remain short on housing stock, REINZ regional commentator in Dunedin Liz Nidd said.

''The Otago market is continuing to struggle with low stock levels,'' she said

Dunedin median prices rose 12.5% on a year ago, to $415,000, Queenstown Lakes district was up 17.7% to $1.05 million and Clutha was up 18% to $262,000.

Mrs Nidd said there were ''plenty of buyers around'', and competition for homes ''remains fierce'' for well-priced properties.

She noted rents were now rising more in line with property prices.

REINZ regional director Gail Hudson, in Queenstown, said sales volumes were low during winter, but that had not stop the area from hitting a new record median, of $1.05million.

''There is still a lack of stock, however, this is typical for this time of the year,'' she said.

While prices overall rose 8.3% around Southland, to $249,000, its data saw large gains in the volumes of 30% overall, with Gore sales up from 17 a year ago to 22 and Invercargill up 25% to 132.

Infometrics economist Mieke Welvaert said the volume of July house sales ''held just above levels'' of last year, but indicators suggested sales were likely to track downward over coming quarters.

''This slowdown in house sales hasn't quite begun to translate into softening house price growth, except in Auckland,'' Ms Welvaert said

She said although the Reserve Bank had pushed out the horizon for its next official cash rate hike, borrowing was still constrained by loan-to-value restrictions.

ASB economist Kim Mundy said ''sluggish sales'' activity in July was widespread across the country.

''Every region excluding Southland recorded a fall in monthly sales activity,'' she said.

Overall, the July data reinforced recent trends in the housing market and regional housing markets were running at very different speeds, she said.

''We expect that the nationwide housing market will continue to tread water over the remainder of the year as regional house price growth converges with the more subdued Auckland housing market,'' she said in a statement.


Add a Comment