Rest of country will catch up to Auckland: Westpac

In response to yesterday’s REINZ and QV sales price data, which showed that house prices had risen 5.2% over the past year nationwide, Stephens pointed out that there was a big divergence between Auckland and the rest of the country.

“In Auckland, the market is red-hot. Barfoot and Thompson's data last week showed that the number of properties on the market in Auckland amounted to only 4.2 months' worth of sales, which is the tightest the market has been since 2007. House prices in Auckland have risen 9.3% in a year, and there is little sign of let-up. Similarly, prices have risen 6.6% in Christchurch over the past year. But annual price gains in other parts of the country have been far weaker - Wellington +1.4%, North Island ex Wellington and Auckland +2.7%, and South Island excluding Christchurch +2.2%.”

He said that might not be the case permanently, though.

“Many people will remember a period in the 1990s when Auckland house prices rose much more rapidly than prices in other parts of New Zealand. Less well-known is the fact that Auckland house prices rose more slowly than most other parts of New Zealand during the mid-2000s boom.”