Median house price back to record, growth slows

The national median house price returned to a record high of $313,000 in September but growth has plateaued, the Real Estate Institute of New Zealand said today.

The median residential property price has yo-yoed within a narrow $3000 band for the last four months, with construction costs and the outlook for interest rates threatening market confidence, institute president Murray Cleland said.

The national median was up 7.9 per cent on a year earlier, compared with September 2005's annual rise of 16 per cent.

"One of the biggest threats to the market's current confidence level will be what the Reserve Bank decides to do on October 26 when it is due to review the Official Cash Rate, and this month's residential statistics certainly won't do anything to dissuade the Reserve Bank if it is considering an increase," Mr Cleland said.

The RBNZ has left official interest rates steady at 7.25 per cent since December 2005, but has continued to warn about inflation pressures, including in the housing market.

Sales for September were up 1.3 per cent on August at 8671, but down nearly 6 per cent on a year earlier. Days to sell improved to 31 in September from 33 in August, but were well above the 27 days to sell in September 2005.

Prices rose in eight of the 12 regions, with metropolitan Auckland up 1.6 per cent at $400,000. Wellington's median fell 2 per cent to $329,000.

Around the regions, Nelson/Marlborough had the largest increase, up 5.8 per cent to $310,000, followed by Northland's 5.7 per cent rise in median to $280,000.

Among those to fall, Southland's median was down 6.4 per cent at $140,000, and Central Otago Lakes district fell 5.1 per cent to $441,000.

Manawatu/Wanganui had the largest annual rise, up 20 per cent, followed by Nelson/Marlborough's 18.2 per cent increase in median price.

Earlier this month, government agency Quotable Value's residential house price index rose 10.4 per cent in the September quarter against a year earlier, the rate of growth slowing from a peak of 16.8 per cent in January.

- NZPA