The RBNZ says that since mid-2012, Auckland house prices have increased 52 per cent, but house prices in the rest of New Zealand have gone up by just 11 per cent.
The extent of this divergence is "unprecedented" says the report's authors. However, they also say that when Auckland house prices have previously gone up significantly compared to those in the rest of the country, the gap eventually starts to close.
Interest rates
Talking about interest rates is almost a full time occupation around the office, as we consider how the global economy, migration, currency prices, the dairy price, falling oil prices, China and the US impact on New Zealand.
Something only has to be a hair out of place and the ripples wash across the economic world -- it's great to watch.
So when Graeme Wheeler, head of our Reserve Bank, announced no change to the official cash rate last week there were no surprises. He would have been seen as weak if he made another cut so quickly after the last one. But I remain certain the cuts must come.
House prices
Tony Alexander, chief economist at BNZ, says Auckland house prices will stay high.
Writing in his weekly newsletter, following the annual Demographia Report that showed Auckland is one of the least affordable cities in the world to live in, he says the fundamentals contributing to the issue will not change for decades.
He says contributing factors to high house prices include low interest rates, lack of new builds, high construction costs (have you seen the price of timber at the local DIY store?), and rapid population growth.
Migration
Just released end-of-year migration figures show that during 2015 New Zealand had a record annual net intake of 64,900 people.
A monthly record 5600 people entered the country in November, and in December the figure was down to 5500 -- could this be the start of a downward trend? Only time will tell. What we do know is 30,000 people settled in Auckland last year (7000 more than in 2014).
Ups and downs
According to RealEstate.co.nz average asking prices in Auckland fell 2.3 per cent to $828,629 in January, down from $848,195 in December.
Inventory has also taken a hit, with the total number of new listings across the country in January being 8144, down 14.6 per cent compared to the same month a year ago.
The national average asking price in January was $542,514, up 3.7 per cent from December, ending a four month consecutive decline, though still short of the all time high of $568,215 set in August 2015.
Read previous columns and listen to property podcasts at: http://goo.gl/EtJHJq
