Signs house prices slowing

House price inflation is continuing to accelerate despite the Reserve Bank raising interest rates and widespread expectations that it should be abating, according to the latest Quotable Value figures.

Sunday, February 12th 2006, 12:00AM

by The Landlord

Average annual growth in house prices nationally was 16.8%, up from 15.8% in December.

Apart from a small blip in October, the QV figures have shown a steady acceleration in annual house price inflation since the 12.1% increase recorded in March last year. Nevertheless, QV spokesman Blue Hancock suggests that "anecdotal feedback and market activity suggests that the market may be beginning to level out. If so, we'd expect to see the residential price movement ease through the second half of summer."

While growth in the main urban areas continues to lag the rest of the country, it too is accelerating with annual growth rising form 13% in December to 14.6% in January.

In the main centres Hamilton showed the strongest growth of 26.0%, although that was down slightly on the 26.9% reported in December. Of the other main centres, the average Christchurch price was up 20.8% on January last year, Wellington up 13.3%, Auckland up 11.4% and Dunedin up 10.4%.

The increase in property values remains strong across the major provincial cities with Whangarei up 32%, Rotorua 31% up, Gisborne up 27%, and Palmerston North up 21.1%. The New Plymouth market appears to be easing with annual growth now 19.6%, down from 25.6% in December.

Nelson, which had been recording actual annual price declines, is now showing renewed growth with the average January price up 5.6% on January last year compared with December's 4.9% increase.

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