Slight fall in October property prices

Average annual growth in house prices nationally was up 14.5% in October compared with 14.9% in September but is still well up on the12.1% annual growth shown in March. QV spokesman Blue Hancock says it’s too early to tell whether the October figures indicate an impending market slowdown. "To be more certain that the property market had entered a slowdown period we would need to see a consistent trend," he says. "Regardless, we do expect at least a levelling of growth in the property market, given expected interest rate rises, falling investor returns and also a slowing population growth rate," Hancock says. QV’s figures are prepared on a three months rolling average basis. Growth rates in most areas were below those reported for September, although prices in some areas continue to grow faster than 20% such as Whangarei, up 30.9%, Hamilton, up 27.1%, Gisborne, up 27.7% and Rotorua, up 25.7%. "Most of the continued growth is still coming from areas where there is an availability of comparatively affordable residential property," Hancock says. Reserve Bank governor Alan Bollard, who is clearly alarmed by the continued high rate of house price inflation, may take some comfort from the fact that growth in the largest city, Auckland at 4.9% in the year ended October, is well below the national average. The fastest growing areas in wider Auckland are Waitakere with 12.4% annual growth and Manukau with 13.2%. Among the other major cities, Wellington city prices were up 11.3% on a year earlier, Christchurch’s were up 18.1% and Dunedin’s were up 16.2%.