House price inflation eases but stays in double digits

Annual growth in house prices eased slightly in March although it remains in double digits, the latest Quotable Value figures show.

Monday, April 11th 2005, 11:21AM

by Jenny Ruth

Nationallly, the average house price rose 12.1% to $290,853 compared with March last year and compared with the 13.5% annual growth recorded in February.

Annual price growth ranged from 56.4% in Opotiki and 50.2% in Stratford to a fall of 4.3% in Nelson and a fall of 5.2% in Tasman.

While there are still hot spots, most areas in New Zealand are showing some abatement in house price growth.

"The cooling of property values started in the major urban areas of New Zealand, and now has begun to extend into some of the provincial cities," says Blue Hancock of QV Valuations.

Cities where annual price growth is still running at more than 20% include New Plymouth, up 31.2%, Wanganui, up 32.4%, Dunedin, up 23.8%, and Tauranga, up 21.2%.

However, all these areas also showed slowing growth - for example, New Plymouth's annual growth was down from 32.6% in February and Dunedin's was down from 27.8%

"Expect the trend of gradual slowing of property value growth to continue for most areas in the coming months," Hancock said.

In the biggest cities, the Auckland region's annual price growth was 5.6%, down from 7.1% in February while Wellington's was down to 10.5% from 10.7% in February.

In the main urban areas nationally, annual house price inflation eased to 9.7% from 10.8% in February.

QV's figures use a residential index methodology, comparing the sale price of each property sold to its capital value. That's in contrast to the Real Estate Institute's figures which are based on actual sales only.

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