10 Dec 2014

Housing supply not meeting demand

8:24 pm on 10 December 2014

The latest record jump in house sales prices shows supply is still not meeting demand in the market, Infometrics economic analyst Gareth Kiernan says.

Gareth Kiernan

Gareth Kiernan Photo: Infometrics

The latest Real Estate Institute figures show the median price in Auckland is a record $670,000, while prices in Waikato/Bay of Plenty, Wellington and Canterbury/Westland are also at their highest ever.

The institute's index shows house prices rose 3.3 percent last month nationally and are now 6 percent higher than a year ago - a sharp increase on the 3.9 percent annual increase shown in October.

The number of sales also jumped 12.2 percent from October and were up 6.5 percent from November 2013.

Mr Kiernan said while regional authorities such as the Auckland Council were picking up their building activity, it was not yet enough.

"While they're running ahead of their targets in terms of new consents coming through, a lot of that is really around land and not so much at this stage in terms of new houses actually being built," she said.

"You'd hope, over time, that the land being freed up does come through into new houses but at this stage there's still a long way to go."

Real Estate Institute chief executive Helen O'Sullivan said more expensive houses were selling best and showing the biggest price increases, while sales of cheaper homes were flat or declining.

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