New Zealand housing index higher in 2011

WELLINGTON: New Zealand’s housing market finished last year on a firm footing, but the outlook for 2012 is uncertain because of the European debt crisis, government property valuer Quotable Value (QV) said.

QV said that its residential property index was up 2.4% in the year to December, after a 1.7% increase in the year to November and a 1.2% rise in October.

The index was now 3.5% below its peak in late 2007.

Recent data have suggested some stability in the housing market, after a sluggish 2010 because of weak domestic consumption and a slow wage growth.

“Despite national values moving upwards during the year, the property market continued to be characterised by lower than normal sales volumes,” said QV research director Jonno Ingerson.

He said sales numbers in 2011 were more than 20% below the long-term average, but were higher compared with 2008 and 2010 when they were marked by low activities. The average sale price, which is not used to calculate the main index, over the three months to December slipped 3% to NZ$398,411 (US$305,407) compared with a year earlier.

Looking forward to 2012, QV said Auckland, the country’s biggest population and business centre, would prosper further because of a growing population.

“While business and consumer confidence seems to be on the increase, there is still some concern about the financial situation in Europe, and what may happen to the New Zealand economy,” Ingerson said.

Prices in Auckland rose 4.3% on a year ago and are now 1.4% above the previous peak in late 2007.

By Reuters