News of a surge in Dunedin property prices, while welcome on the one hand, should be treated on the other, with a modicum of wariness.
The natural and understandable inclination for property owners is to experience a warming glow of satisfaction of the kind that might accompany a decent Christmas bonus; or to feel just a little more comfortable about the overall economy, real estate having become in the popular consciousness a shorthand measure of its general state of health - often misleadingly.
For if anything should have been learnt by New Zealanders during the past 18 months of downturn and recession, it is the danger of worshipping at the altar of an ever-rising property market.
Time and again, economists, the governor of the Reserve Bank, politicians of various colours and numerous literate commentators have warned against such false idols, and the almost cult-like infatuation they seem to inspire.
Bluntly, the wealth effect created by a housing market that continues to rise, while it might look and feel good to individual property owners, in terms of the broader national economy is something of a mirage.
Overseas credit at reasonable interest rates fuels borrowing for housing - in the form of mortgages - which pushes demand and prices up, which in turn encourages investment in property.
When either the market slows (and that may be due to a number of factors, such as static immigration, increasing unemployment, higher materials costs) or some of that investment borrowing is geared at such low margins that fluctuations in interest rates can compromise the safety of the entire investment, then this self-reflexive market begins to teeter.
Either way, it has little to do with the productive sector of the economy that creates goods or services which can be exported or sold to increase the country's real wealth - and reduce an ever-expanding national debt.
Property sellers in the southern suburbs of the city, from Waverley to Green Island and including St Kilda and St Clair, appear to be the main beneficiaries of the 8.7% lift in prices over the year to December 2009.
According to the figures released by Quotable Value New Zealand, this is the highest percentage increase in the country.
Prices also rose elsewhere around the city, although not to the same extent, with an overall 4.9% rise pushing the average sale price of a residential house to $276,875.
Nationally, the residential price index released by QV showed house values rose by 2.8% during 2009, which put them on average only 4.9% below the historical market peak.
Fortunately, this trend has been accompanied by voices of sobriety pointing out that the extent to which the rises herald "recovery" has to be seen in the context of both rebalancing of the entire market, and a localised recalibration of supply and demand.
A reluctance of sellers to put property on the market during the downturn has created its own temporary shortage of housing stock, and this has been particularly the case in the southern suburbs, where the shortage of lower-value housing has been acute.
And while the figures might show a windfall for property owners in Dunedin, the pattern has not been repeated across the province.
Waitaki, for example, showed a 5.5% drop, Central Otago a 2.7% decline and Queenstown Lakes and Clutha drops of 0.9% and 0.7% respectively.
The flip side is, of course, that in these areas the news for buyers might be said to be good, and in Dunedin an exacerbation of what some insist is an already overpriced housing market.
Many first-time buyers attempting to get a foothold on the home-ownership ladder will concur.
Be that as it may, and despite the expressed caveats on generalising from the property market to the wider economy, increased activity in the housing sector is indicative at least of a renewed confidence abroad.
With luck and a following wind, this may translate into movement that spins the wheels of the economy proper - to productive and lasting effect.
And here is a final thought: to what extent has GST contributed to housing inflation? When the median cost of a new house in Auckland, for example, is estimated to be $500,000, then some $60,000 or more may be anticipated in tax revenue: something, we suggest, the Minister of Finance might ponder as he prepares this year's crucial Budget.
