Residential property prices: still they climb

Auckland was behind another solid increase in residential property prices in April, for the second month running.

Thursday, May 17th 2007, 9:11AM

by The Landlord

Real Estate Institute (REINZ) figures show the Auckland region median price bounded up another $9,000 from $443,000 in March to $452,000 in April, helping the national median price up from $343,500 in March to $349,000 in April.

Nine regions experiencing increases in prices, with just two regions falling in price and one remaining unchanged, illustrated the strength of the market.

But Auckland again took the limelight with the Auckland metropolitan median up $10,000 from $449,000 to $459,000. This was helped by a drop in sales from 3,446 in March to 2,559 in April, which although partly due to the impact of the Easter and Anzac public holidays shortening April to 18 working days, suggests that a shortage of properties is a key factor in rising prices.

Auckland region days to sell were unchanged from March at 27, considerably less than the April 2006 figure of 33 days to sell, while national days to sell were 28 compared with 34 in April 2006.

REINZ says the increased prices are a not unexpected response to recent attempts to tighten monetary conditions and take the steam out of the market.

“But the market seems to have shrugged off the recent Official Cash Rate increase and consequent mortgage interest rate rises, suggesting that the real issue is one of demand – too many people trying to buy too few houses with the result that prices are being pushed up”, says REINZ national president Murray Cleland.

Around the regions, Northland managed a stout $14,000 increase in its regional median price from $306,000 to $320,000, more than recovering from the drop in March from February’s median of $310,000.

Waikato/Bay of Plenty was one of the few regions to experience a drop, down from $320,000 in March to $312,500, while Hawkes Bay surged ahead by $12,000 from $268,000 in March to $280,000 in April.

Manawatu/Wanganui was unchanged at $230,000 while Taranaki came up with the single biggest regional rise, up $14,500 from $260,500 in March to $275,000 in April.

Wellington was up from $375,000 in March to $377,900 and Nelson/Marlborough was also up from $326,500 to $330,300.

Canterbury/Westland rose from $300,000 to $310,000 and Central Otago Lakes was up from $416,000 to $430,000.

Otago eased slightly from $230,000 to $227,000, while Southland continued its charge with an increase from $157,000 to $164,500, taking the lead in the annual price growth table with a 28.76% rise from the April 2006 median of $127,750.

Manawatu/Wanganui was displaced from first to second on the table, with a 21.05% year-on-year increase, while Northland is now third on 18.95%.

National sales were down from 10,989 in March to 8,194 in April because of the short working month, but sales were nevertheless well up on the 7,576 of April 2006.

In the major centres and provincial cities, there were a number of strong price rises, including Whangarei city which was up from $300,000 in March to $315,000, while North Shore city was up from $520,000 to $540,000.

Hamilton city had a bit of a reversal with its median falling from $343,500 in March to $337,750 although probably due to a big drop in sales from 368 in March to 256 in April.

However Tauranga showed further progress with its median up from $362,000 in March to $370,000 in April. Gisborne city remained as one of the fastest price growth cities over the last year, with an increase from $268,500 in March to $275,000 in April, a 29.4% increase over the April 2006 median of $212,500.

Napier and Hastings cities also experienced a price boom, with Napier up $13,000 from $290,500 in March to $303,500 in April, outdone by Hastings with a $13,750 rise from $266,250 in March to $280,000 in April – a 21.7% increase over the April 2006 median of $230,000.

Palmerston North city was another provincial city to do well, up from $270,000 in March to $283,000 in April while further south, central Wellington stood out with an increase from $395,000 in March to $430,000 in April.

Christchurch city was up from $325,000 in March to $335,000 in April and both central Otago and Queenstown notched up good gains with central Otago up from $356,750 in March to $384,500 in April and Queenstown up from $491,000 in March to $529,500 in April.

Dunedin city’s median went up from $250,000 in March to $260,000 for the latest month while Invercargill continued on its roll with a rise from $165,000 in March to $175,550 in April, up 27.49% from the April 2006 median of $137,690.

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