The Real Estate Institute of New Zealand (REINZ) has released its June house price results, which revealed ongoing strong growth in supply restricted Auckland, but slower growth elsewhere.
In the month of June, the national stratified median price was flat at $415,200, whereas prices in Auckland – New Zealand’s biggest city – surged to a record $634,150 (see next chart).
Auckland’s impact on the recent house price boom is clearly evident by the next chart, which shows prices there easily eclipsing the national average. Prices in Christchurch – New Zealand’s second biggest city – have also risen at a faster than average pace, whereas Wellington – New Zealand’s capital and third biggest city – has lagged the national average (see next chart).
House price growth remains strong (see next chart). Nationally, house prices rose by 8.4% in the year to June 2013 to be 9% above their November 2007 peak. Prices in New Zealand’s largest city, Auckland, surged by 19.8% in the year to June 2013 to be 24% above their July 2007 peak. This was followed by New Zealand’s second biggest city, Christchurch, where prices rose by 10.6% over the year to be 14% above peak. Finally, prices in the capital, Wellington, rose by 3.1% in the year to June but were 2% below their September 2007 peak.
As I said last month, New Zealand’s National Government needs to speed-up supply side reforms, particularly in Auckland and Christchurch, whereas the RBNZ needs to get cracking in implementing its macro-prudential restrictions on high loan-to-value mortgage lending. It’s all looking rather too late.
