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House prices down in December, up in year

NZN 16/01/2017 Jonathan Underhill

New Zealand's median house price fell 0.8 per cent in December from November's record high, although regions including Wellington recorded all-time highs.

The national median house price fell to $516,000 last month from $520,000 in November, the Real Estate Institute said.

The median price rose 11 per cent from December 2015.

The median price in Auckland fell 1.4 per cent in December from November to $840,000 but was up 9.1 per cent from a year earlier.

The volume of sales fell 11 per cent in December from the same month of 2015 to 6,533, while the volume of sales in Auckland fell 15.8 per cent.

"Sales activity was weak across many regions in New Zealand, with Wellington a key exception," said Kim Mundy, an economist at ASB Bank.

"Slower sales, associated with the latest round of investor-focused loan-to-value ratio restrictions, are also weighing on house price growth. We expect to see activity remain subdued heading into 2017, especially in Auckland where prices are most stretched."

Wellington recorded the biggest year-on-year gain in median price, up 22 per cent to $530,175. Among other regions to hit record highs in December, Northland's median price rose 14 per cent to $410,000, Hawke's Bay climbed 11 per cent to $345,000, Otago gained 10 per cent to $310,000 and Southland jumped 15 per cent to $235,000.

Record migration and low interest rates have bolstered the country's housing market, prompting the central bank to tighten up lending rules to reduce the risk to the nation's financial stability.

New restrictions on lending to property investors with high loan-to-value ratios came into play October 1, taking some of the heat out of the market.

The institute said an underlying trend of rising prices across New Zealand was in contrast to flat or falling sales volumes in many parts of the country.

The median days to sell rose by one day year-on-year to 31 nationally, while in Auckland days to sell rose by two to 33.

The number of homes sold for more than $1 million rose by 12 per cent to 848 in December from a year earlier.

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