Golden weather cools for real estate

Growth in house prices has increased according to latest figures, although there are warnings a slowdown is just around the corner.

Statistics released today by Quotable Value will show that residential property prices rose by 16.8 per cent over the last 12 months. The growth for January is a rise from 15.8 per cent in the December figures.

However, QV spokesman Blue Hancock said anecdotal feedback and market activity suggested the market was beginning to level out.

"If so, we would expect to see the Residential Price Movement ease through the second half of summer."

Auckland's growth of 11.4 per cent showed a sharp increase on the December figures - up from 7.9 per cent.

Southern suburbs continue to have the highest growth rate at 12.7 per cent. Waitakere City (12.3 per cent), North Shore City (14 per cent) and Papakura (17.2 per cent) are all showing a similar level of growth to that reported last month, suggesting a stabilising of the market.

However, in Manukau City, property values increased 14.6 per cent.

Houses in the lower price bracket showed strong value growth, as first- time buyers seek to enter the market before being priced out.

Property values continued to rise sharply in the provincial centres with Whangarei at 32 per cent, Rotorua 31 per cent, Gisborne 27 per cent and Palmerston North 21.1 per cent over the 12-month period.

Last week real estate agents said sales figures for January were well down on previous years, blaming high interest rates, two long holiday weekends, long school holidays and many weeks of hot weather.

Harcourts, the country's largest real estate agency, saw its sales volume drop 30 to 40 per cent last month while Auckland's biggest agency, Barfoot & Thompson, reported the slowest January in five years.

Tony Alexander, BNZ chief economist, said negative factors would dominate in the second half of this year, including slower population growth, worries about jobs, potential investors preferring term deposits, existing investors growing tired of waiting for rent rises and deciding to quit their stock, and a falling exchange rate.

SALES GROWTH

* Hamilton 26 per cent

* Christchurch 20.8 per cent

* Wellington 13.3 per cent

* Auckland 11.4 per cent

* Dunedin 10.4 per cent.