House prices just keep rising
There are few signs of a slowing housing market in the latest figures from Quotable Value New Zealand with house prices up for the eighth consecutive quarter.
Wednesday, August 27th 2003, 10:43PM
by Jenny Ruth
Quoteable Value also revised upwards the March increase from 2.6% to 5.3%.
Among the regions, Nelson prices grew most strongly, up 40% in the year ended June. Other areas showing annual growth above 15% include Auckland City, North Shore, Napier and Dunedin.
"The impacting factors on the residential property market are still positive with rents continuing to rise in most areas, house sale volumes rising, unemployment remaining near its lowest level in 15 years, reduced short-term interest rates, low fixed mortgage rates and property continuing to gain favour as an investment vehicle," says Laurence Feehan of Quotable Value.
"In short, there is no reason to believe that the strong growth in house prices won’t continue over the next quarter," Feehan says.
Darren Gibbs, senior economist at Deutsche Bank, says given that Quotable Value has been revising recent quarters’ figures upwards, the latest quarter is also likely to turn out to be higher, "perhaps substantially."
"With housing demand at buoyant levels and available listings low, we expect house prices to continue to rise at a solid rate over the remainder of this year," Gibbs says. Beyond that, a slowing economy, declining net migration and increased residential building should bring demand and supply into better balance, he says.
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