Average price nears $1m

Downtown, Auckland, New Zealand.

The average cost of a home in Auckland now sits at $931,807 according to QV's House Price index. However, the property valuation firm says price rises have been less rampant of late, a clear indication the market is in calmer waters.

QV also says the value of some categories of housing, such as investment property, "may have fallen".

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The organisation says Auckland prices increased 24.4 per cent year on year -- 6.5 per cent over the past three months -- putting it 70.5 per cent higher than the previous market peak of late 2007.

However, when adjusted for inflation, values rose 23.9 per cent over the past year and are 44.9 per cent above the 2007 peak. Annual wage growth is 1.6 per cent (Stats NZ).

Rise of apartments

The average asking price for an Auckland apartment reached a record high of $660,000 in November, according to RealEstate.co.nz. It says the rise equates to a 31.5 per cent increase on a year ago. In March, the average asking price for an apartment in the Super City was $500,000.

Auckland dominates the market for apartments nationally, accounting for 71.9 per cent of all apartment sales.

More houses needed

Auckland building consents are on the up and up according to Statistics New Zealand. It says the number of new homes given the go ahead in October is well above historical averages for the city.

In all, 805 new dwellings got the go-ahead across Auckland during the month (up by 214 on October last year). However, this is still well below the estimated 1200 extra homes needed every month to keep up with demand (around 14,500 a year).

Canterbury consented 489 new dwellings in October, down 197 on a year ago, the third monthly drop in a row. Building consents in Waikato were up 65 to 259, and in the Bay of Plenty it's 205 (up 85).

Nationally, 2349 new dwellings were consented in October; made up of 244 apartments, 177 retirement village units, and 196 townhouses, flats, and units. The national trend for new dwellings is increasing, and is at its highest level since July 2004.

Lower rates predicted

Economists at Westpac predict the Reserve Bank will cut the official cash rate on December 10 to 2.5 per cent.

Citing continued low inflation -- reaching just 1 per cent by next September (RBNZ's target is 2 per cent) -- they expect Reserve Bank governor Graeme Wheeler to take the OCR down to a record low of 2 per cent next year. This could see floating mortgage rates head below 5.5 per cent.