National house prices rose $17,475 last month to reach a $425,000 median as prices in Auckland, Canterbury/Westland, Wellington and Waikato/Bay of Plenty surged ahead to new highs.

Real Estate Institute data just out showed Auckland reached $620,000, Canterbury/Westland $389,750, Wellington $420,000 and Waikato/Bay of Plenty $340,000.

Compared to last November, Taranaki recorded the largest increase in median price, up 16.3 per cent, followed by Central Otago Lakes with 15.3 per cent and Auckland with 14.8 per cent.

But Helen O'Sullivan pointed to changes in the volumes of places sold.


"The increase in real estate sales for November was weaker than expected, with November sales up only 2.7 per cent over October. As the average increase between October and November over the last 10 years has been more than 10 per cent, this indicates a further softening in sales volumes.

The restrictions on high LVR lending may well be a driver of the softer sales figures, with sales below $400,000 falling almost 20 per cent compared to November last year," she said.

See a regional breakdown of the real estate stats here.

The REINZ Housing Price Index increased 1.2 per cent compared with October to sit at a new high of 3,885.5. Auckland increased by 2.9 per cent in November, Christchurch rose 3.4 per cent, and Wellington rose 4.4 per cent.

All three major cities plus "Other South Island" reached new highs in November. For the 12 months to November, the Auckland Index rose 14.9, the Christchurch Index rose 12.2 per cent and the Wellington Index increased 6.2 per cent. The National Index increased 9.6 per cent compared to November last year.

Are LVRs starting to bite?

In a 'first impression' of the monthly stats published by Westpac Bank this morning, the bank's economists say the numbers validate its view that rising interest rates and LVR restrictions would start to 'dampen housing market activity' from November this year.

"We postulated that the first sign of a slowdown would be a drop in market turnover, beginning in November 2013. Today's data validates this view," said the bank.

"The annual pace of house price inflation slowed a little this month to 9.6 per cent. However, given the relationship between house sales and house prices we don't expect to see the pace of house price inflation start to cool until next year."

"Falling house sales is consistent with our view that the high-LVR lending restrictions would bite hard initially. However, we expect that the impact will moderate over time."

ASB Bank economist Daniel Smith said today's REINZ figures showed "some slowdown in housing market activity, quite possibly as a result of the RBNZ's restrictions of high-LVR mortgages."

"But with supply remaining very constrained in the Auckland and Canterbury regions, any reduction in demand has not alleviated the upwards pressure on prices as yet. We do expect the rate of house price growth to ease over the coming year, but only gradually. The RBNZ will be watching the housing market closely, and is likely to raise the OCR in March next year."

The Reserve Bank said it had left its official cash rate (OCR) unchanged at 2.5 per cent but left no clues as to when the next tightening cycle would begin. Market expectations are for the bank to start increasing rates early next year in order to stave off expected inflation pressures.

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