House prices up again but indicators point to levelling

In the face of dire predictions from economists, property prices continued to steam higher last month, says Quotable Value.

Property values increased 14.2 per cent in the year to June, up from 13.5 per cent in the year to May.

"Despite thoughts that the property market is about to enter a slowdown period, we are still seeing increasing levels of growth in property values across most areas of the country, QV's Blue Hancock said yesterday.

Nelson was the only region where house prices fell, easing 1.3 per cent in the year to June.

Residential property values in Hamilton grew 23.6 per cent in the June year - the most of any main centres, followed closely by Dunedin at 22.1 per cent and Christchurch at 18.5 per cent, according to QV.

Wellington residential property prices rose 8.9 per cent. Auckland City properties grew 5.7 per cent.

Mr Hancock said there had been renewed growth in property values in Queenstown and Tasman, after a softer period - " further evidence of the current buoyancy in the market".

But "all the indicators are pointing to a levelling- out of growth in values rather than a continued increase ... "

British magazine the Economist recently said low interest rates and a loss of faith in sharemarkets has seen residential property markets round the world develop into "the biggest bubble in history".

It reported New Zealand saw the fifth-largest increase in residential property prices in the year to March out of 20 countries surveyed.

The magazine is predicting a gradual correction in global housing markets.

"House prices will not collapse overnight like stockmarkets - a slow puncture is more likely. But over the next five years, several countries are likely to experience price falls of 20 per cent or more."

- NZPA

Property values

In year to June:

Hamilton up 23.6pc
Dunedin up 22.1pc
Christchurch up 18.5pc
Wellington up 8.9pc
Auckland City up 5.7pc
Nelson down 1.3pc

Source: Quotable Value