New Zealand house prices edged higher and properties were sold in a shorter amount of time last month as strong demand amid rising net migration and low interest rates continue to show signs of stabilisation in the property market.
The median house price rose to $346,750 in August from $340,000 a month earlier, according to Real Estate Institute of New Zealand (REINZ) data. The volume of sales slipped to 5,878 from 6,014 in July, while the length of time it took to sell a house fell to 34 days from 37 days over the period.
"Recent stabilisation in the housing market is likely to tempt potential sellers back into the market restoring the balance between supply and demand," said Jane Turner, economist at ASB.
"We continue to expect house price inflation will remain subdued over the next few years, with appetite for housing tempered by rising interest rates, low affordability and rising unemployment."
Last week central bank Governor Alan Bollard said the house market was helping prop up the economic recovery, but said the current resurgence in property was probably a temporary phenomenon that was artificially supported by an unusually low number of dwellings on offer over the past four months.
New Zealand property values marked their fourth consecutive improvement according to QV Valuations data.
"The RBNZ are on edge watching the recent recovery in house prices, warning that further gains will prolong the rebalancing process at the expense of future growth," Turner said. "However, the RBNZ expect that the recent lift in house prices is likely to be temporary, to which we agree."
REINZ president Mike Elford said the further improvements in the property market were pleasing after a "disastrous" 2008, but that he was still "cautious in drawing conclusions from these trends."
The REINZ Monthly Housing Price Index rose 1.2% to 3172.7 in August.
The index uses stratification, in which an average of for sale prices is taken across common groups of housing at a suburb level, to provide a more accurate measure of prices for the body, and was designed by the Reserve Bank. The base value of 1000 is taken from prices in January 1992.
Northland median house prices slipped to $295,000 from $315,000 in July, according to today's REINZ report, with the number of houses sold dropping to 126 from 149.
The median house price in Auckland climbed to $450,000 from $440,000 the previous month, with 2,067 houses sold, up from 2,024in July. In Waikato/Bay of Plenty/Gisborne the median price dropped to $317,000 from $320,000. Hawkes Bay prices slid to $253,000 from $271,500. In Taranaki, prices edged higher to $287,500 from $280,100.
Manawatu/Wanganui's median price declined to $210,000 from $224,250. Wellington's median price advanced to $395,500 from $370,000 in July, with sales climbing to 622 from 618 the previous month.
In Nelson and Marlborough, the median price decreased to $325,000 from $328,000. Canterbury/Westland sales fell to 885 from 905, while the median price slipped to $295,000 from $297,000.
In Central Otago Lakes, which includes Queenstown, sales increased to 87 from 84 in July, while the median price jumped to $435,000 from $411,000. Otago sales increased to 275 from 229, while the median price rose to $236,000 from $223,000 in the previous month. In Southland the median price rose to $200,000 from $190,000.