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January house prices up on fewer sales

NZN 13/02/2017 Tina Morrison

New Zealand's median house price rose 9.4 per cent in January although activity slowed, according to the Real Estate Institute.

The national median house price increased to $490,000 in January from $448,000 a year earlier, the institute said.

The price declined 5 per cent from the December median level of $516,000, which the institute said was in line with typical patterns for quieter holiday trading. There were 4307 sales in January, lower than the 6533 sales in December and 5048 in January last year.

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.

In Auckland, rising house prices have made purchasing property unaffordable for many.

In January, the median Auckland house price increased 12 per cent to $805,000 from a year earlier, although it was 5 per cent weaker than December. After months of record low numbers of houses available for sale across Auckland, the number of properties available jumped 17 per cent to 1135 from the year earlier, and sales volumes fell 18 per cent to 1247.

"Sales activity was weak across many regions in New Zealand, with Auckland sales activity particularly soft," said ASB economist Kim Mundy.

"Soft demand, associated with the investor-focused loan-to-value ratio restrictions, is slowing sales and also weighing on house price growth. We expect to see activity remain subdued over 2017, especially in Auckland where prices are most stretched."

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