Otago leads property increase

Otago median house prices have posted a massive gain of almost 33% for January, hitting a record $475,000, according to Real Estate Institute of New Zealand data released yesterday.

The national median price for January, compared with a year ago, rose 3.4% to $520,000. Auckland was down 4.8% to $820,000, Dunedin was up 12% at $365,000 and Queenstown Lakes District’s median of $900,000 was up 14% on a year ago.

REINZ chief executive Bindi Norwell said warmer weather in January had helped sales and it was the first time there had been a positive year-on-year sales increase in seven months.

"House prices across the country continue to hold up, with 14 out of 16 regions experiencing a year-on-year price increase.

"Otago’s record price for January was driven by a strong increase in Clutha and the Central Otago District, up 53.4% and 39.4% respectively," Ms Norwell said in a statement.

Otago’s 32.9% gain to $475,000 and Hawke’s Bay’s 18.4% gain to hit its record $438,000 far outstripped gains in the other 14 regions.

ASB economist Kim Mundy said month-on-month house sales declined slightly, from 6571 in December to 6410, after having gained some momentum towards the end of last year.

"We expect sales activity and price growth to remain subdued in 2018 as new housing policies are expected to weigh on overall activity," Ms Mundy said.

REINZ regional director in Queenstown Gail Hudson said  the local market was "steady" at present, and noted buyer urgency was down on the first three quarters of 2017.

"There are more people attending open homes, compared to the previous four months, an indication that the market is picking up after election concerns," she said.

Her outlook for coming months is for the market to "track cautiously but steadily".

REINZ regional commentator in Dunedin Liz Nidd said while Dunedin prices were up 12% on January last year, they were down 3.9% on December.

"After a slowdown last year, due to the election, the catch-up appears to be happening now," Mrs Nidd said.

Listings around the city were up, providing plenty of choice for buyers and Mrs Nidd expected activity levels to pick up now that school had resumed.

"In a positive move for the city, first-home buyers seemed to be featuring strongly this side of Christmas," she said.

However, there were indications the requirement for a 20% deposit was still proving difficult for some and in the rental market there were multiple applicants on almost every property.

"Very little new investment property is being introduced to the market," she said.

simon.hartley@odt.co.nz 

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