Auckland house prices spiraling upwards

The sudden house price surge has left economists shaking their heads. Photo / Herald on Sunday

Auckland is driving the rise in house selling price expectations, while the rest of the country lags behind, a report today says.

The upward trend in home sellers' price expectations is being driven by the main centres of Auckland, Wellington and Christchurch, while rural New Zealand faces an extended property market "hangover", the latest market report from realestate.co.nz says.

The Auckland market in particular is driving rises in asking prices, realestate.co.nz CEO Alister Helm said.

The latest report on the month of November showed an ongoing shortage in properties listed in the main centres, with rural New Zealand being hit with slower sales coupled with a swelling of inventory levels, Helm said.

"While national price expectations continue to rise, this is mainly driven by the Auckland market. In the provinces by contrast, slow sales during October and November increased the available stock of properties up to an inventory level of just over 51 weeks," he said.

The number of listings nationally rose 2 per cent from October, and 4 per cent from November 2008, to 13,857.

The national average asking price last month was $419,586 - only marginally up from October and a 2 per cent rise on the previous three months.

The steady growth in listings during the past three months had begun to outpace the rate of sales of property across the country, leading to the growth in inventory levels, the report said.

Compared to the 36-week national figure, the inventory level for Auckland was 27.6 weeks, up 5 per cent from October but down 43 per cent from a year earlier.

In Wellington, inventory was equal to 17.7 weeks of average sales, up 9 per cent on the month, while also down 43 per cent from November 2008.

For Canterbury the inventory was 26.3 weeks, up 1 per cent from October and down 40 per cent over the year.

A 4.1 per cent rise in asking prices in Auckland, compared to the prior three months, was a direct result of the tightness of the market, with inventory levels remaining tight as the flow of new listings seemed to be being met by a steady demand, the report said.

The same inventory tightness in the other main centres of Wellington and Canterbury did not seem to be directly having an impact on asking prices, for now.

For the country as a whole the pendulum had swung in the direction of a buyers' market as the inventory of property on the market was being bolstered by rises in new listings which was meeting a steady, yet uninspiring, sales level, the report said.

Of 19 regions covered in the survey, 11 showed inventory levels running significantly above long term averages.

"The only conspicuous regions reversing this trend are the three metropolitan regions of Auckland, Wellington and Canterbury all of which are showing inventory levels well below long term averages and well below the national average."

The three metropolitan regions were showing characteristics more akin to a sellers' market, the report said.

That had prompted some speculation of an emerging property bubble, but the broader data clearly refuted that assertion.

- INTEREST.CO.NZ, NZPA