House prices creeping up

New Zealand house prices recovered last month to be close to levels of a year ago, supporting views the economy has emerged from its longest recession in more than 30 years, Reuters reported today.

Quotable Value's residential house price index fell 1.1 per cent in the year to September, compared with a 2.8 per cent decline the previous month - the sixth month in a row the trend in property values has improved.

The government agency said there were signs of more activity in the market with an increase in the number of sales and more listings in many areas.

However the activity is patchy, with some markets much stronger than others, making it harder to estimate national trends, QV spokeswoman Glenda Whitehead said in a statement.

"The market is still clearly in a state of change," she told Reuters.

The housing market, once a major inflationary concern for the Reserve Bank of New Zealand (RBNZ), peaked in late 2007, but fell sharply because of high borrowing costs and prices, while consumers cut their spending amid a deepening recession and rising unemployment.

QV said the average sale price rose 0.7 per cent to NZ$387,567 ($287,087) on the previous month.

House prices in Auckland, the biggest population and commercial centre, were 0.6 higher in September from a year ago, compared with a 1.9 per cent fall in August, while the capital, Wellington, was up 1.1 per cent after a 0.1 per cent drop the month before.

The average sale price for the Auckland region increased from $502,022 to $507,617.

Most of the main centres showed higher values than a year ago, while most of the provincial centre were still below September 2008 prices.

The monthly residential price report is based on sale prices of properties over the past three months compared with sales over the corresponding three-month period a year earlier. The data is not seasonally adjusted.