Auckland house prices are rising faster than those in all three major Australian cities and the city is now more aligned with major international hubs than the rest of the New Zealand.
The latest NZ Housing and Construction Quarterly from the Ministry of Business, Innovation and Employment showed Auckland heading a chart of house price growth, followed by Sydney then Brisbane and Melbourne.
Bryan Field, the ministry's modelling and sector trends manager, said Auckland was being driven by unique factors which don't affect the rest of the country.
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"Auckland's large population, size and connections to multi-national businesses make it more similar to Melbourne and Sydney than Wellington and Christchurch, and the housing market reflects that," he said. The report stressed Auckland's unique position.
"While Auckland house prices have decoupled from house prices in the rest of New Zealand, Auckland house price growth follows a similar pattern to the three largest Australian cities, particularly Sydney. This suggests some of the factors driving Auckland house prices are common to large cities across Australasia," the report said.
Auckland house price growth was more similar to Sydney, Melbourne or Brisbane, than it is to Wellington or Christchurch. Does this suggest that Auckland's housing market is driven by factors that are unrelated to the rest of the country?" the report asked.
"This could be due to the economic similarities between Auckland and these three Australian cities. All four cities have populations exceeding 1 million, have large central business districts and host many internationally connected businesses. In contrast, no other city in New Zealand has a population exceeding 500,000," the report said.
Shamubeel Eaqub, NZIER principal economist says while the rest of New Zealand looks to Auckland, Auckland looks gaze is more firmly fixed on Australia and Asia.
Auckland house prices
• Rising faster than Sydney, Brisbane Melbourne
• Due to size, population, multi-national business centre
• 'Decoupled' from house prices elsewhere in NZ
[Sources: Ministry of Business, Innovation and Employment]