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Prices almost as high as they've ever been, experts agree

House prices around the country are now almost back to their peak, according to both Quotable Value and the Real Estate Institute (REINZ).

By Susan Edmunds

The two organisations have released their statistics for May and while they disagree exactly how much national residential property prices have increased, they agree that it’s happening all over the country.

QV reported that house prices were just 2%t below their previous highest point. REINZ said they were just $1000 off.

Some of the difference between the two may be due to the way the data is recorded.

REINZ data is made up of unconditional sales submitted by real estate agents. QV’s data is based on processed legal transactions, which means the REINZ data is more up-to-date.

But QV’s data takes into account all of the country’s sales, while REINZ’s only covers those handled by real estate agents.

REINZ said the national median house price rose by $4000 to $369,000 in May - just $1000 off the March 2012 record high and up 5.4% on May 2011, and Auckland set a new record median of $500,000, up 7.8% on May last year.

QV said national prices had increased 3.9% on the same month last year to an average of $411,788.

Both agree Auckland is still leading the way.

REINZ reported a new record median of $500,000 for the city, up 7.8% on May last year.  QV reported values in the wider Auckland area up 1.2% over the past month, 1.4% up over the past three months and 5.7% up on the past year.

What is noticeable in May’s data is that other centres are finally following suit. Previously, the country had been a tale of two real estate markets, with prices in the provinces stalling.

QV research director Jonno Ingerson said: “This more widespread increase in values is in contrast to two or three months ago when values in many areas appeared to be flattening off.”

This month, Taranaki recorded a 60.3% increase in sales, according to QV and a price increase of 11.8%. Whangarei's prices were up 3.7% on the year before and Wanganui, 2.8%.

There has been no sign of a winter slow-down. Ingerson said sales activity had remained relatively strong over the past couple of months. “The relatively low number of new listings and sales over the past few years is leading to an increase in pent-up demand,” he said.

“There are now buyers who have been looking for a house for some time and either cannot find something that meets their needs, or are being out-bid by other keen buyers.”

REINZ revealed there were 7,175 unconditional sales in May, an increase of 26.4% on April and up 24.4% on May 2012.

The increase of 26.4% is more than twice the average increase of 12.3% between April and May over the past 10 years, with May the third strongest month for real estate sales across the year.

“Sales volumes have been surprisingly strong in May, with all regions recording increases in sales over April and over May last year,” said REINZ chief executive Helen O’Sullivan.

“May is typically stronger than April, ranking as the third busiest month in the year for real estate sales, but the increase is considerably stronger than normal seasonal trends would suggest.”

She said low interest rates were probably also responsible.