Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


House prices climb in Dec, but rate of increase stabilising

House prices climb in Dec, but rate of increase stabilising

Jan 15 (BusinessDesk) - New Zealand house prices continued their climb to a record high in December, driven by price gains in Auckland and Canterbury due to restricted supply.

However, a number of factors suggest this is unlikely to force a change to the official cash rate this year.

December figures released by the Real Estate Institute of New Zealand show the national median house price stood at $389,000, up 9.6 per cent on December 2011.

The REINZ Stratified House Price Index, which smoothes out peaks and troughs in median prices, rose 6.7 per cent over the same period.

The highest median price rise over the year was Auckland's 10.5 per cent increase, corresponding to a stratified index rise of 8.6 per cent.

Canterbury's median price increased by 8 per cent to a record high of $351,000, with the stratified index rising 11.8 per cent. The Wellington, Otago and Queenstown markets experienced more modest price rises over 2012.

The Reserve Bank of New Zealand noted the strengthening housing market in its December 2012 Monetary Policy Statement.

It cited rising house prices, particularly in Auckland, and rising construction costs in Canterbury accompanying increased consents as two potential inflationary pressures in the housing market, warning that increased prices and household spending could push up inflation if low residential construction continued to restrict supply.

However, the RBNZ projected house price inflation would level out in coming years as long as housing stock increased and households continued to be cautious in their level of credit demand.

"Given household focus on (debt) consolidation, it is unlikely that the current pick-up in house price inflation will have the flow-on impact to household spending that was seen through the mid-2000s," the RBNZ said.

The RBNZ was likely to keep a close eye on the housing market this year for signs of inflationary pressure, but leave the OCR unchanged, suggested ANZ International Senior Economist Jane Turner on the back of today's REINZ figures.

"Encouragingly for the RBNZ, it appears the housing market did not pick up any new momentum having stabilised over the past few months," Turner said. "As an indicator, it suggests the annual rate of house price inflation should stabilise around current levels (currently around 6-7% on a nationwide basis)."

The median number days to sell had remained largely stable at 36 days across the country, indicating the rate of house price inflation would likely remain similarly steady.

"Nonetheless, new house listings remain at very low levels and the imbalance between supply and demand should continue to underpin further increase in house prices," Turner cautioned.

"If pressures were to intensify, the RBNZ may consider the option of using macro prudential tools to ease pressures in the market."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news