Mixed news on housing market front

Those hoping it won't be necessary for the Reserve Bank to raise interest rates soon may draw some comfort from the latest housing consents figures - but not from those issued by Quotable Value yesterday.

Friday, November 28th 2003, 2:41AM

by Jenny Ruth

In seasonally adjusted terms, the number of consents fell 10.5% to 2,508 in October from September. However, these optimists would be clutching at straws. The figures also show that the 2,399 consents excluding apartments issued in October made up the highest monthly total since Statistics New Zealand started collecting the data in its current form in January 1990.

For the year ended October, the 29,221 consents issued were up 13% or 3,322 on the previous year. That was the largest total for a year ending October since 1976.

While 10 out of 16 regions recorded more housing approvals in October than last October, the number of consents in the key Auckland region fell, although the Auckland consents still accounted for 30% of the October total.

Meanwhile, Quotable Value's figures also released on Thursday show house prices rose 17% in the year ended September, the highest annual national house price growth in 15 years.

In the three months ended September, house prices in Waitakere were up 9%, Christchurch prices rose 7.5% and Tauranga's climbed 7.15%.

Nelson house prices rose nearly 6% in the quarter and were up a massive 39% in the year ended September.

Blue Hancock of Quotable Value says house prices have risen every quarter for the last two years.

"Continued house price growth at current levels is likely to be unsustainable in the medium term, especially given the current drop in people coming to New Zealand," Hancock says.

Sales volumes appear to be leveling off and rising interest rates should also put pressure on house prices.

But countering those factors, unemployment is very low while section prices and construction costs both continue to rise.

"We can still expect increasing pressure on values in the short-term as a result of buyer demand outstripping supply," he says.

Backing up the official figures, real estate agent Harcourts reports it had 8% more listings in October than in the same month last year. However, the number of houses it sold in October jumped 23% compared with last year.

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