House prices across the country have risen an average 8 per cent in the past year as the $30 billion-a-year housing market continues to confound critics predicting a bust.
But while the booming market is good news for home owners, first home buyers priced are being out of the market. According to the latest spring Real Estate Institute of New Zealand figures, median house sale prices have risen from $300,000 in November last year to $324,000.
Standout performers on the residential property scene over the past 12 months have been Northland and Wellington, but Auckland and Waikato have also performed solidly. The median sale price in Northland has risen from $253,500 to $306,250 over the past 12 months. Whangarei city has been one of the best performing areas with house prices rising $40,000. It's a similar trend in Wellington where median prices rose from $315,250 a year ago to $355,000 on the back of steady market activity.
The housing markets in Waikato and Bay of Plenty regions also recorded steady rises, but not as significant as other regions, the exception being in the country.
Western Bay of Plenty was the exception, however, with median sale prices up from $315,000 to nearly $360,000 in the past 12 months. There are huge variations in the topsy-turvy Auckland market. While the median sale price rose 3.8 per cent from $390,000 to $415,000 over the past year, areas such as Milford and Takapuna recorded staggering rises. A year ago the median sale price for a home in those two North Shore suburbs was $580,000 - now it is $657,500. East Coast Bays was also a solid performer, with median sale prices up from $469,000 12 months ago to $519,500 and Mt Roskill and Birkenhead recorded increases of $40,000 or more. However, there were some strange anomalies with prices in leafy inner suburbs Mt Eden and Epsom falling from $575,000 to $510,000. And in Mt Albert median prices fell from $455,000 a year ago to $441,000.
The latest REINZ figures come just a week after Reserve Bank Governor Alan Bollard warned investing in houses rather than shares would condemn the country to weak economic growth.
But real estate agents are delighted.
Havard Daniels of real estate firm Professionals believed migrants were the main driver behind the rises. And despite Government calls for people to invest in business, investors still regarded property as a safe bet, he said.
"After recent sharemarket upsets, more people are saying they'll stick with residential investment as they don't trust that type of environment."