The latest Real Estate Institute sales figures show the national median house price rose from $211,250 in July to $215,000 in August, a 16.2% increase on August last year. July's national median house price represented a 14.2% rise on July last year while the June price was 13.3% increase.
The number of houses sold in August rose to 10,193 from 10,138 in July and was 26.8% more than the 8,036 sold in August last year.
On top of this strong showing, Deutsche Bank senior economist Darren Gibbs noted the median days to sell a house fell to a record low of 25 days in August.
Gibbs thinks that slowing net immigration and increasing construction should begin to bring the housing market into better balance. "That said, from past experience, we are conscious that, once entrenched, past episodes of house price inflation have usually continued until stopped by rising interest rates (and even then, with a lag)," he says.
Nevertheless, Real Estate Insitute president Graeme Woodley is picking the market to enter "a period of consolidation" over the next 12 months.
He notes that the Auckland median house price rose particularly strongly from $298,000 in July to $315,000 in August, a 19.3% increase on the $264,000 price in August last year.
"However, it is worth remembering these figures were recorded just before the Reserve Bank's recent warnings about speculative investment in residential property and those warnings are likely to dampen down some of the demand," Woodley says.
But Gibbs describes Reserve Bank governor Alan Bollard's warnings as "mere jawboning," reckoning that Bollard will be reluctant to raise rates while exports remain so weak.
Sales activity in Auckland was also strong with 3,642 homes sold, 35.7% of total New Zealand sales in August. That was up from 3,570 in July and 2,873 in August 2002.
But the buoyancy was far from being restricted to Auckland. The median house price in the Nelson/Marlborough was up 58.6% on August last year.
The figures show the median price rose in five of the 11 regions and fell in the other six in August compared with July, but that the price rose in all regions but Manawatu/Wanganui compared with August last year.
Sales were up in seven of the regions and down in the other four compared with July but they were up in all regions compared with August last year.
