Houses cheaper - but still at New York levels

File photo / Christine Cornege

The median house price in Waikato/Bay of Plenty has dropped $5000 but a survey due out on Monday could show the country still highly over-priced and big price falls necessary before we achieve better world standards.

Yesterday, the Real Estate Institute announced that November's nationwide $367,500 median and 6008 sales slid to $355,000 and just 5312 sales in December.

But chief executive Helen O'Sullivan said that was the best December since 2007.

Waikato/Bay of Plenty, Manawatu/Wanganui, Taranaki, Nelson/Marlborough, Canterbury/Westland and Otago had all recorded their strongest December sales volumes in four years, she said.

Auckland showed its strongest sales volume turnover since 2006.

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Next week, the eighth Demographia International Housing Affordability Survey will be released and will probably show the country's house prices are still exorbitant.

Last January, Demographia said our houses were among the world's most expensive; when incomes were taken into account, Auckland and Tauranga were less affordable than New York.

Low incomes and high house prices had left Kiwis badly off and prevented many from owning property.

Of 325 cities and regions, New Zealand ranked with Australia, Britain, the United States, Canada and Ireland.

Yesterday, Goldman Sachs economist Philip Borkin said a recovery was under way and activity in the housing market had improved in the final two months of last year.

He said poor figures in the two months previous - September and October - "were weighed down by the distraction of the Rugby World Cup rather than anything more fundamental".

He added that while New Zealand house prices remained overvalued in many studies, he believed that there would still be positive house price growth in the future and there would be no sharp correction.

ASB economist Christina Leung said strong Canterbury house sales were encouraging, citing sales last month.