9 Dec 2011

Strong rise in housing market

9:53 pm on 9 December 2011

There are more signs of life in the housing market, but household spending remains low.

Real Estate Institute figures show monthly house sales passed 6000 in November for the first time since March 2010.

The national median house sale price rose 2.4% to $367,500 - a new record median house price for New Zealand. The previous record of $365,000 was reached in March 2011.

Once adjustments for the quality of houses being sold was made, the increase was 1.1%. The median price on that basis is now 2.3% below its 2007 peak, although annual sales are half that of four years ago.

The institute's figures follow those from Quotable Value on Thursday which showed house values up 1.7% in November.

House sales rose by one fifth on October sales and were 17% higher than November a year ago.

Infometrics economist Matt Nolan says a pick-up was expected after the Rugby World Cup and while sales were up across the board, Auckland and Canterbury were the main drivers behind the rise.

Household spending, though, remains in the dumps. Spending using electronic cards fell 0.2% in November.

Economists say with the Rugby World Cup over, and population and wage growth sluggish, retailers face a hard slog.