House price inflation accelerates yet again

Jenny Ruth

Monday 8th August 2005

House price inflation accelerated yet again in July, according to the latest Quotable Value figures.

Average growth in house prices nationally was up 14.3% in July from July last year to $310,420. That compares with the 14.2% annual increase in June, the 13.5% rise in May, 12.5% rise in April and 12.1% rise in March when it had appeared that house price inflation was abating.

"There are still more areas throughout the country where property values are growing at increasing rates versus those that are slowing," says QV's Blue Hancock.

In particular, some cities are still showing strong growth including Hamilton were the average price was up 24.8% on July last year and Dunedin which was up 21.4%.

Hancock says a number of provincial areas are also buoyant including New Plymouth, up 35.4% in July from July last year, Gisborne, up 28.9%, Whangarei, up 25.2% and Rotorua, up 20.5%.

"These areas represent affordable options for first home buyers and investors, which is contributing to the strong growth in these areas," he says.

QV's figures are prepared on a three months rolling average basis. Auckland and Wellington house prices are growing at significantly lower rates than other cities, up 8.3% and 11.6% respectively in July from July last year.

The only area to show an annual decline in house prices was Nelson, down 0.7%.

That's in sharp contrast to Stratford where the annual increase was a whopping 57.5%.

Hancock notes the Queenstown market has revived with annual growth jumping from just 1.5% in January to 11.3% in July.

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