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National Median House Price eclipses itself again

Thursday 19th June 2003

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New Zealand residential house market defied the predictions of some market commentators during May with another solid increase in the national median price from $203,000 to $210,000 on the back of very strong sales, according to the Real Estate Institutes' National President, Mr. Graeme Woodley.

Despite suggestions that the market might be in line for a 'breather', Mr. Woodley said the national median increase was underwritten by a particularly busy market with 11,158 sales in May compared with 9,047 sales in April 2003 and 9,016 sales in the previous corresponding month, May 2002.

However the Auckland market showed signs of stabilising with the Auckland median price slipping slightly from the April 2003 median of $290,000 to $289,000 in May 2003, but still considerably ahead of the May 2002 Auckland median of $266,000.

"Although it would be easy to say Auckland has come off the top after leading the recent surge in house prices around the country, the fact that the May volume reached 4,005 sales, a record for May since 1996, indicates that the market in Auckland is very buoyant still, although undoubtedly underpinned by strong apartment sales. Auckland sales for May compared with 3,009 sales in April and 3,268 sales in May 2002.

"The median sales price for the Auckland region has eased only by a thousand dollars, and the Institute believes it is far more likely that this is a result of sales of lesser value predominating in this period, rather than a slip in overall values."

Mr. Woodley said the Auckland region statistics showed North Shore, Waitakere, Auckland City and Manakau medians all rose from April but that Papakura and Metropolitan Auckland medians fell back, accounting for the overall slip in the Auckland region median over the same period.

Nationally, the median increase was driven by a strong performance by Wellington and several smaller regions, Mr. Woodley said.

The Wellington median was up from $225,000 to $235,000 month on month and well above the $204,000 May 2002 median.

The Northland region was up from $150,000 in April 2003 to $167,000 in May 2003, bringing it closer to the May 2002 median of $170,000.

Hawkes Bay saw a strong rise in the median from $156,500 in April 2003 to $163,050 in May, well up on the May 2002 median of $133,000.

Similarly Nelson/Marlborough continued its strong run with a rise in the median from $198,000 in April 2003 to $217,000 in May 2003, (May 2002, $157,500).

The Taranaki median price was up from $117,000 in April to $120,000 in May 2003 (May 2002, $110,000).

Canterbury/Westland was also up from $155,000 in April to $157,000 in May 2003 (May 2002, $139,000).

The median price in Southland also rose, from $95,250 in April to $100,000 in May 2003, (May 2002, $85,000).

Regions to experience a slight decline in median price in April 2003 included Waikato/BOP/Gisborne, Manawatu/Wanganui, and Otago.

Mr. Woodley said the reduction in mortgage interest rates was supporting market confidence and the recent reduction in the Official Cash Rate by the Reserve Bank would encourage stability in the home ownership market.

"Over the next couple of months we might expect some seasonal easing in the market but with likely further falls in interest rates and strong demand for housing arising from factors such as positive migration, the fundamentals of the market still look pretty sound. Essentially we are looking at a market really only catching up on a very flat period in the late 1990s", he said.

In Christchurch City, sales rose strongly from the 784 transactions to 1,035 in the latest period. The median price also improved, from $150,500 in May 2002 to $172,500 in May 2003 (April 2003: $170,000).

In the North Eastern suburbs of Avondale, Avonside and Burwood Park, the median price rose from $137,500 in May 2002 to $169,000 in May 2003, but eased from the $184,355 recorded last month.

In the Western Suburbs, the median price increased from both last year and last month, while in the North Western Inner suburbs of Merivale, Fendalton and Ilam the median price eased from that recorded in May 2002 and April 2003.

In the Central Christchurch City area, the median price rose sharply to $213,375, from $171,000 in April 2003 and compared well with the $186,000 recorded in May 2002.

In Dunedin, the median price of $125,000, had firmed on the $122,750 and $100,000 recorded in April 2003 and May 2002 respectively. Sales also trended upwards, from 286 in April and 243 in May 2002 to 332 in the latest period.

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