House prices at 10-year high

Auckland, Wellington and Christchurch led the housing recovery that sparked a record national price.

Real Estate Institute sale figures revealed that sales last month had pushed the national median to $355,000, which president Peter McDonald said set a record for the past 10 years.

"For the first time we are over the peak of prices in 2007 which is a very reassuring milestone," he said.

Prices rose in seven out of 12 regions and it took only 31 days to sell, down on 33 days in September and 47 days this time last year. Volumes are fluctuating: 4469 houses were sold last October, 6464 in September and 6091 last month.

The sudden price surge has left economists shaking their heads.

NZIER principal economist Shamubeel Eaqub said New Zealand could not afford another credit-fuelled housing boom because it would damage the dollar. "The recession was an opportunity to purge many of the imbalances accumulated in the economy over the past decade, but this has not happened.

"If this housing juggernaut continues, there is a very real of threat the economy will experience another - perhaps more severe - recession," he said.

Posted: 14 Nov 2009

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