QV says house prices up 1.9% in quarter
House prices continue to rise, but the pace of growth is slowing, according to the latest Quotable Value figures.
Thursday, August 19th 2004, 6:24AM
by Jenny Ruth
Mind you, the March quarter figures were revised from the previously published 4% rise, and the latest rise makes it 12 quarters in a row of price increases.
And the increase for the year ended June was 22%, up from the 15.5% increase in the previous year.
Significantly, among the regions, Nelson become one of the first areas in the past two years to record a quarterly decline, down 2.5% in the June quarter. "The decrease in Nelson is a result of the phenomenal, but unsustainable, growth experienced over the past two years," says QV Valuations spokesman Blue Hancock.
Other "hot spots" around the country are also cooling, but Napier isn’t one of them. Its house price index rose 6.1% in the June quarter, the fastest growth of any area in the quarter, bringing the city’s annual increase to 30.8%.
Dunedin and Tauranga both saw 3.1% growth in the June quarter, with their annual increases at 29.5% and 28.2% respectively.
Other notable annual increases are Christchurch, up 27.8%, Invercargill, up 25.2%, Waitakere, up 24.5% and Auckland, up 20.7%.
"Continued house price growth at current levels is not likely to be sustainable in the medium term, given increasing interest rates and the downward trend in net migration," Hancock says.
In the year ended June, net migration was down 48% to 22,000 people from the previous year and the Reserve Bank has raised its official cash rate four times this year so far from 5% to 6%.
But for those expecting the housing market to slow further, Hancock adds a word of warning: "The June quarter has traditionally shown the least growth or greatest decline of any of the quarters over the previous four years." He is still expecting "modest growth" in most quarters in the September quarter.
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