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Housing market buzzing but not quite on fire

The housing market is buzzing, if not quite on fire. But it's the Auckland and quake-affected Christchurch markets which are to blame while markets in the rest of the country remain subdued.

By Jenny Ruth

The latest figures from the Real Estate Institute of New Zealand (REINZ) show whichever way you measure it, national house prices are at a record and sales volumes for a June month are at their highest since 2007.

As well, the length of time it took to sell a house fell slightly in June and remains below the long-term average.

The REINZ data shows its house price index, which smoothes out more expensive or cheaper houses being sold in any one month, rose to a record in June, up 0.3% from May, and up 5.3% from June last year.

REINZ's national median house price rose to a record $372,000 in June compared with $369,000 in May and $360,000 in June last year.

Nationally, there were 6,135 houses sold in June compared with 7,175 in May – the institute says, eliminating seasonaly factors, that's about steady – and up 17.3% on the 5,229 houses sold in June last year. That's the most houses sold in the month of June since 2007 when 7,474 were sold.

The number of days it took to sell a house fell to 37 days in June from 38 days in May and compared with 44 days in June last year and the long-term average of about 40 days.

“Keen buyer interest in Auckland and Christchurch – which together make up about half of national activity – drove the New Zealand real estate market to new highs in June,” says institute chief executive Helen O'Sullivan.

“The overall pattern for the rest of New Zealand shows improvement in sales volumes with prices, on the whole, steady rather than up,” O'Sullivan says.

“The constraint across the country appears to be shortage of properties avialable to meet buyer demand.” This constraint is most acute in Auckland and Christchurch, O'Sullivan says.

She cautions the market is still far from reaching its strength in the boom years. “ Buyers and sellers lost confidence during the global financial crisis and, in that context, the curent market should be seen as recovering rather than booming.”

Backing up O'Sullivan's comments, while sales volumes were strong in June, they were still well short of the the 9,789 houses sold in June 2003.