Average Auckland prices slipping

House prices are continuing to drop across Auckland according to the latest figures from QV, it reports they are down 0.7 per cent over the past three months, but the regions are picking up. Nevertheless, the average price of a home in Auckland City suburbs is $1.088 million, and is $925,656 across the wider Super City.

This week's property podcast with Steve Hart

QV's Andrea Rush says: "There continues to be strong growth in home values in Whangarei, Tauranga, Hamilton, Napier, Wellington and Queenstown. Values in Christchurch and Dunedin are also rising at a more moderate pace."

However, Harcourts' CEO Chris Kennedy, writes that despite talk of the market cooling, "high demand and low supply" means prices will continue to climb.

Talking to Herald business writer Liam Dann, Devon Funds Management's Paul Glass says: "There's no doubt at all that we have a bubble in housing. The amount of speculative investing that goes into housing is very problematic and needs to be addressed."

BNZ's Tony Alexander says Chinese buyers are re-entering the market, but are being a bit more selective about what they buy.

Rate cuts

On interest rates, the BNZ's Tony Alexander says rates will stay low for "many, many years".

He says the Reserve Bank will only cut the official cash rate if offshore economies get a lot worse, and that cutting rates "in a futile attempt [by the RBNZ] to get inflation to settle near 2 per cent" is unlikely.

Still, Reserve Bank Governor Graeme Wheeler will need to do something soon to lift annual growth up from its current 0.1 per cent.

The ANZ has joined Westpac economists and others in predicting a cut in the OCR, because of the high Kiwi dollar, lower inflation expectations, receding export prices, and dairy payout prospects. Expect to see the OCR at 2.25 per cent on June 9.

Construction

Annual residential building consents in Auckland rose 21 per cent in 2015, but we are still more than 26,000 homes short of what we need in the Super City.

Economists at Westpac say a construction boom is spreading beyond Auckland to Bay of Plenty and Hamilton, where consents issued in the December quarter were up more than 50 per cent on the same time in 2014.

They say reconstruction spending on housing in Christchurch is well advanced and has started to ease back.

Foreign buyers

More than 37,000 IRD numbers were issued to foreigners between October and February. Because of a rule change introduced in October 2015, non-residents can't buy or sell a property without one.

Over time, this will provide a clear picture of the percentage of homes sold to foreigners.

Free on Monday

Our quarterly Property Report is free with Monday's New Zealand Herald. It includes a list of the latest property prices across the North Island, an indepth look at the rental market, why property sellers could be sued and why going West may be best.