The median house price jumped from $175,000 in January to $186,000 in February. That’s 7.2% higher than the $173,500 median price recorded in February last year. While sales activity has been strong for several months, this is the first clear sign of house price inflation.
The number of homes sold in February jumped to 8,733 compared with 6,771 in the traditionally slow January month and well up on the 6,182 sold in February last year.
Earlier today, Brash raised his official cash rate (OCR) from 4.75% to 5%, citing the strength of the housing market as one of his concerns.
Real Estate Institute president Rex Hadley says "the entire real estate industry will be thrilled" with these figures, but they aren’t surprising in the current economic environment.
"Residential property has always provided a ‘snapshot’ of the public’s attitude to the economic environment." Among the positive influences are positive net migration, still relatively low interest rates, increasing job opportunities and significant wages growth, Hadley says.
Nevertheless, he says it would be unwise to expect that sales volume or the median price will stay at these levels through 2002, even though he expects the economy to grow strongly.
February’s transactions were worth $1.97 billion, well up on the $1.41 billion worth of residential property sold in January.
The institute’s figures show that activity in all of the 11 regions measured improved in February from both January and from February last year.
But the median house price fell in two regions, Northland and Nelson/Marlborough, in February compared with January, rising in the other nine regions. Compared with February last year, the median price fell in Northland and Canterbury/Westland while rising in the other nine regions.
In the key Auckland market, which is likely to be among Brash’s major inflation concerns, the number of homes sold jumped from 1,895 in February last year and 2,288 in January to 3,120 this February.
While Auckland’s median house price fell from $247,000 in February last year to $245,000 in January, in February this year it jumped to $258,000.
TOTAL DWELLINGS MEDIAN PRICE
COMPARISONS FOR FEBRUARY 2000-2002
| REGION | FEB00 | FEB01 | JAN02 | FEB02 | | --------------------------------------------- | ------------ | ----------- | ------------ | ------------ | | Northland | 131,000 | 156,000 | 160,000 | 155,000 | | Auckland | 240,000 | 247,000 | 245,000 | 258,000 | | Waikato/BOP/Gisborne | 156,000 | 163,000 | 165,000 | 166,000 | | Hawkes Bay | 127,000 | 128,000 | 135,000 | 138,000 | | Manawatu/Wanganui | 112,000 | 113,000 | 98,250 | 114,000 | | Taranaki | 112,500 | 100,000 | 100,000 | 105,250 | | Wellington | 184,000 | 189,050 | 191,000 | 200,000 | | Nelson/Marlborough | 145,750 | 146,500 | 158,000 | 147,500 | | Canterbury/Westland (incl Sth Canterbury) | 141,250 | 147,000 | 140,000 | 145,000 | | Otago | 96,000 | 101,500 | 98,000 | 109,500 | | Southland | 82,750 | 79,000 | 80,000 | 85,500 | | NZ Total | $171,000 | 173,500 | $175,000 | $186,000 |
