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High-end house prices surging

By Anne Gibson

Trio of prime suburbs pass $1m median but overall sales down
NZ houses are the world's third most over-valued behind Canada and Belgium. Photo / File
NZ houses are the world's third most over-valued behind Canada and Belgium. Photo / File

House prices in Auckland's blue-ribbon suburbs are rising fast, latest Real Estate Institute figures show.

Data released yesterday compared median prices between October and November. Mt Eden/Epsom was up from $923,000 to $1,025,500, Devonport from $890,000 to $1,014,000 and eastern suburbs including Remuera up from $988,000 to $1,150,000 in just a month.

Real Estate Institute chief executive Helen O'Sullivan said: "This time of year tends to be popular for bringing some of those high-end homes to market. We do get a bit of an effect. As a result, house prices in those areas can tend to move quite dramatically."

Some prices were down in the west, with the Waitakeres falling from $560,000 to $528,000 and Henderson down from $515,000 to $511,000.

Economists warn against comparing one month with another, saying the timeframe is too short.

Overall, Auckland house prices continued to surge, up from $540,000 in November 2012 to $582,000 in October and $620,000 last month.

In terms of sales, Auckland recorded 2,794 last month, up on 2,681 in October but down on the 2,920 homes sold in November last year.

The International Monetary Fund, Reserve Bank and OECD warn that New Zealand is exposed to financial risk because of ever-increasing debt-funded house prices.

Ms O'Sullivan yesterday announced a new record national median price of $425,000 - up $17,475. She said Auckland, Canterbury/Westland, Wellington and Waikato/Bay of Plenty led price rises.

See a regional breakdown of the real estate stats here.


Auckland's days to sell rose one day in November, from 29 days in October to 30 days. Compared with November 2012 the number of days to sell was also steady at 30 days.

Over the past decade, the number of days to sell in November had averaged 32 days in the Auckland region, the Real Estate Institute said.

"The trend in the median price continues to improve strongly, while the trend in the number of days to sell continues to improve. However, the trend in sales volume has moved from improving to falling," the institute said of Auckland.

Westpac said national sales tallies fell 6 per cent last month and combined with October's fall, housing market turnover had now fallen 10 per cent over the past two months.

NZ: 3rd most over-priced

New Zealand houses are the world's third most over-valued behind Canada and Belgium, according to an analysis by Deutsche Bank economists.

Peter Hooper, Torsten Slok and Matthew Luzzetti ranked different countries' housing markets according to an average of two ratios: home prices to income and home prices to rent.

New Zealand is running 77 per cent ahead of its historic home price-to-rent ratio and in terms of home prices to income, we rank sixth most over-valued, running 26 per cent ahead of the historic ratio.

Averaging these two figures out, Canada is the worst, running at an average over-valuation of 60 per cent, followed by Belgium at 56 per cent and New Zealand at 51 per cent.

The next most over-valued housing markets are Norway, Australia, France, Britain, Sweden, Finland, Spain, the Netherlands, Austria, Denmark and Italy. Only when they hit Ireland and the United States do the economists calculate these markets are under-valued.

Japan is at the bottom of the list, with a housing market 39 per cent under-valued, just ahead of Korea which is 18 per cent under-valued, Germany 15 per cent under-valued and Greece 6 per cent under-valued.

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