16 November 2009

Median house prices hit a 10-year high during the month of October.  This was driven by increased demand as New Zealand’s property market faces a shortage of listings.

According to data released last week by the Real Estate Institute of New Zealand, the national median house price rose to $355,000NZD in October – the highest for the past ten years.  This was up from a median of $350,000NZD in September.  Median values increased in seven of the twelve New Zealand districts surveyed.

The volume of sales declined 5.8% to 6,091 from a month earlier as the shortage of properties continued to keep new listings for spring low and helped bump up prices.

Peter McDonald of REINZ said “The rises aren’t, in most cases, dramatic, but slow and steady over the past few months as confidence returns to the market.”

This news comes after state-owned valuer Quotable Value reported that house values in October were up on a year ago and they also claimed that this was driven mainly by a shortage of listings.

Figures from QV valuation are based on a three month moving average and showed that nationwide values in October were 0.2 percent above the same time last year, having been 1.1 percent below in September.  This is the first time this year that values have climbed above last year’s level.

However against increased values, QV valuation also noted the subdued level of sales.  Manager Glenda Whitehead commented: “Market activity remains below normal spring levels.  The number of sales has remained relatively static over the past few months, and there is little evidence of an increase in new listings in most areas.”

This had led to an imbalance in the market with insufficient properties to meet buyers’ demand.  Increased competition among buyers has put pressure on house prices resulting in a significant improvement in New Zealand’s property market.

The considerable recovery in property prices since earlier this year is especially apparent in the main centres.  Auckland Area values are up 2.5 percent on last year, the Wellington Area is 1.6 percent up, Christchurch 1.3 percent up, and Dunedin 4.3 percent up.

Ref: stuff.co.nz, QV Valuations