Steve Hart: House price growth slows

Reports show that nationally, the median price rose by 3.9 per cent year on year to $530,000. Photo / 123RF

Prices rose in 14 of New Zealand's 16 regions for the year to October, leading to the median house price for New Zealand, excluding Auckland, reaching a record price of $440,000.

The Real Estate Institute of New Zealand reports that nationally, the median price rose by 3.9 per cent year on year to $530,000.

However, median prices in Auckland fell by 3.2 per cent year on year to $850,000 - the biggest fall since December 2010.

The only other region across the country to experience a fall in the median price year-on-year, was Nelson, which saw a decrease of 6.8 per cent to $447,500 - the biggest drop since April 2012.

In a press release, Bindi Norwell, CEO of the institute says: "As we've seen for some months now, prices across the country have continued to increase, albeit at a slower rate than the increases we've seen in some regions for the last couple of years.

"Waikato is now the sixth region in the country to have exceeded the half a million dollar mark at least once - something, that a few months ago, we predicted would happen shortly.

"The Auckland Region's decrease of 3.2 per cent year-on-year is predominantly the result of a large number of apartments being sold in the old Auckland City boundary which has therefore brought the median price down for the entire region.

"Auckland City's median fell by 17 per cent to $850,000 the lowest price it's been for 16 months."

In the Franklin District prices increased 16 per cent year-on-year to $737,000 and North Shore City remains New Zealand's only million-dollar plus city.

Demand still firm
The housing outlook is a key area of uncertainty according to the latest ASB quarterly economic report.

The bank's economists expect housing construction to continue to strengthen in Wellington and remain steady in Auckland, as "continued housing supply shortages underpin construction demand in these cities".

Meanwhile, they write that house building demand is likely to ease from cyclically-high levels throughout the rest of the country as population growth slows.

They also say the Government's housing policies are likely to result in slightly less pressure on house prices than previously expected.

The economists continue to expect the physical shortage of housing in Auckland and Wellington to support house prices.