The media has certainly been alert to discussions around the possibility of a housing boom starting to emerge – even seeing the Prime Minister weigh into the debate on TVNZ’s breakfast show yesterday.
Certainly the property market has come alive in the past 6 months with a significant increase in sales with some localised price increases, most significantly in Auckland and Christchurch. In these two markets when viewed on the basis of the more accurate Stratified median house price index as published jointly by the Reserve Bank and the Real Estate Institute (REINZ) you can see new peaks being achieved as detailed in the following 2 charts:
In Auckland the Stratified median price in February was $513,612 which is up $3,500 from the peak of the market before the crash of 2007 – a period of over four and a half years, although the last 14 months has seen a steady and progressive rise and in December the market price peaked at a new level of $516,625.
In Christchurch the Stratified median price in February was $355,725 which is still down from the peak of the market before the crash of 2007 – a period of over four and a half years, although the prices have been steadily rising for about two and a half years and in November the market price peaked at a new level of $367,025, up $4,500 from the 2007 peak.
These are the two most active regions in today’s market and yet neither are showing any real price appreciation when you factor in inflation over the past 5 years.
When you consider the national picture on house prices the chart below shows that the stratified median house price at $369,550 in February is still 3% below the peak of the market of November 2007, although the recent 14 months has seen a steady increase from a low of $351,450 in January 2011.
Looking at the Wellington market shows a very different picture. In this region stratified median price in February was $405,250, down 4.6% from the peak of Oct 2009 / Sep 2007 which saw prices of $424,615 and $423,955 respectively.