5 Mar 2014

High pressure on house prices, listings

7:55 am on 5 March 2014

The pressure on house prices remains up, with the latest figures on new listings of houses available for sale showing supply remains tight.

Foreign investors make up a small proportion of house buyers, so are not pushing up house prices - Housing Minister Nick Smith.

Foreign investors make up a small proportion of house buyers, so are not pushing up house prices - Housing Minister Nick Smith. Photo: RNZ / Diego Opatowski

New listings jumped 31 percent in February from January but economists say that is a purely seasonal move and does nothing to ease the severe shortage.

Listings were actually down 7 percent from February last year, meaning the total number of houses available for sale fell to just below 26 weeks' worth of sales, down from the long-term average of 37 weeks.

In Auckland, supply is down to less than 13 weeks' worth of sales, while in Christchurch it's just over 16 weeks.

In the main centres, new listings declined by 5 percent in Auckland and 1 percent Wellington but rose 3 percent in Canterbury.

ASB Bank economist Chris Tennent-Brown said there had been a small lift in listings and inventory as the start of summer but the market was now looking tight.

"There are signs that there were some behavioural changes around the time of the LVR (loan-to-value ratio) restrictions being introduced," Mr Tennent-Brown said.

"It certainly looked like activity and listings really picked up around October last year but now new listings have really dropped away and the market is looking very tight again."

Nationally, asking prices rose 9 percent to a record high $483,099. Auckland also reached a new high, up 12 percent to $677,370 while Canterbury dropped 1 percent to $444,227.