WELLINGTON, New Zealand–New Zealand house prices eased in April from March but the fall is unlikely to provide any relief for the country’s central bank as prices remain sharply higher on the year.
Data from the Real Estate Institute of New Zealand, or Reinz, showed Monday that the national median home price totaled 390,500 New Zealand dollars (US$323,412) in April, down 2.4% on the month but 7.0% higher on the year.
The Reinz Monthly Housing Index, which uses all sales by Reinz members rather than just a median price, rose 0.8% in April compared with March.
There is growing concern about high housing costs in New Zealand as shortages in the country’s two largest cities–Auckland and Christchurch in Canterbury–drive prices. The Reinz data for April show house prices in Auckland were down 1.2% on the month but jumped 13.3% on the year, while in the Canterbury-Westland region, where Christchurch is the major city, prices fell 1.7% on the month but were up 10% on the year.
While demand in Auckland is being fueled by the city’s expanding population, Christchurch residents need new housing after 11,500 homes were destroyed in a series of earthquakes that have hit the region since Sept. 4, 2010. The government moved Friday to make building new homes in Auckland easier by streamlining urban planning and building permissions, while the central bank will increase capital requirements for the four large banks in relation to low equity mortgages from September.
However, Monday’s data show house prices elsewhere in the country are also starting to rise. “Several regions appear to be benefiting from the tail-wind generated by the strength of house prices in Auckland and Christchurch,” Helen O’Sullivan, chief executive of Reinz, said.
The number of homes sold totaled 7,104 in April compared with 8,128 in March and 5,676 in April 2012, while the number of days taken to sell a house, a gauge of underlying demand, rose to 34 from 31 in March and was down from 37 a year earlier.