The housing market started spring in a more confident mood with the number of properties sold and selling prices both rising.
According to the Real Estate Institute of New Zealand, the national median price of all homes sold in September hit a new record high of $597,000, up $12,000 or 2% from the previous high of $585,000 set in March and June of this year.
And the Auckland market seemed to shake of its winter blues with the median price rising $18,000 or 2% to $848,000 from $830,000 in August. But that was still below the record of $900,000 set in March last year.
When Auckland is excluded from the figures, the median price for the rest of the country was a new record of $500,000. New records were also set in Manawatu/Whanganui, Southland, Taranaki and Hawke's Bay.
However three regions went against the trend and recorded median prices below September last year - West Coast -7.5%, Northland -5.5% and Nelson -5.4%.
The REINZ House Price Index, which adjusts for differences in the mix of properties being sold from month to month, recorded a 1.4% gain for the month across the country, and a 3.6% gain for the year.
But perhaps of even more significance than the firmer prices was that sales volumes were also up, perhaps signalling the beginning of the end of what was a very sluggish market over winter
The REINZ recorded 5896 sales in September, up 3.3% compared to September last year and the highest number of sales for the month of September in three years.
While sales volumes and selling prices were up in September, the total number of properties available for sale around the country was down 7.3% on September last year, suggesting the slow winter months did not result in a large overhang of unsold properties.
The average numbers of days required to sell a property also dropped, suggesting a slightly firmer market (see chart below).
Westpac's economists believe the stronger housing figures could signal and end to falling interest rates.
In a Home Truths newsletter on the latest REINZ figures, Westpac Chief Economist Dominick Stephens reiterated his view that house prices would rise over summer.
"This data leaves us very comfortable with our long-held views," Stephens said.
"Our expectation remains that low interest rates will boost asset prices, including lifting house price inflation to 7% per annum.
"That will give a short term boost to consumer spending, which combined with the Government's lossening of the reins, will spark slightly higher rates of GDP growth next year than we have experienced this year.
"This is important information for the Reserve Bank, which is not forecasting a pick up in the houisng market.
"The evidence is tentative to date, but a third strong month of housing data would cause the RBNZ to sit up and take notice.
"On monetary policy, the RBNZ would be more likely to conclude that it has lowered interest rates far enough - that's why we are forecasting one further OCR reduction and no more.
"The banking supervision arm of the RBNZ will also be keenly interested.
"It is unlikely that the RBNZ's policy of loosening the LVR restrictions will be eliminated, but a stronger housing market might slow the pace of loosening," Stephens said.
The interactive charts below show the trends in median selling prices, volumes sold and days to sell in all regions of the country.
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