Housing booms in capital city

Wellington house prices have risen by almost a quarter in a year.

The capital led five of the 12 regions to record high median sale prices in December, Real Estate Institute of New Zealand (REINZ) figures show.

‘‘Wellington experienced strong house price growth, as median prices in the region have risen nearly $100,000, or 22 per cent, over the past year to hit a new record of $530,175, even with sales volumes rising since November,’’ REINZ chief executive Bindi Norwell said.

In Auckland, the housing bubble shows no signs of popping unless big changes are made, Norwell said.

The Auckland median sale price rose 9.1 per cent year-on-year to $840,000. Sales volumes across the region were 2 per cent lower than November 2016.

The national median house price rose to $516,000 in December – an 11 per cent increase year-onyear.

The Auckland problem

Norwell said strong underlying population growth and a lack of supply in the market to meet Auckland’s growing population has contributed to Auckland’s long-term median price trend consistently rising.

And if those do not change, she suggests ‘‘we may be unlikely to see much change to the upward trend in prices’’.

ASB economist Kim Mundy said slower sales associated with the latest round of investorfocused loan-to-value ratio (LVR) restrictions were weighing house price growth.

However, Mundy expected activity to remain subdued this year, especially in Auckland where prices were most stretched.

‘‘We expect house price growth to be muted over 2017, but robust demand and limited supply will continue to provide a floor to house prices.’’

Median prices jump

on The underlying trend was rising house prices right across New Zealand, with all regions hitting new record median prices in the past three months, Norwell said.

However, by contrast, sales volumes have flatted or fallen in many areas of the country.

The volume of sales for December 2016 was 6533 – an 11 per cent decrease compared with December 2015.

The national median house price rose $51,000 (11 per cent) to $516,000 year-on-year, just shy of the record median price of $520,000 set in November 2016.