Fri, 13 Nov 2009 6:23p.m.
New figures from the Real Estate Institute put the current median price at 355 thousand dollars.
By Tony Field
House prices have reached a new all time high. New figures from the Real Estate Institute put the current median price at $355,000.
That is 6 percent higher than a year ago - and even tops the previous market record $352,000 set in September 2007.
It is the brought bold claim from the Real Estate President that buying a house is now once again "the very best investment" there is.
Matt Poland and his wife spent nine months looking for a house. Every time they found a house they liked - it ended up in a bidding war.
Peter Mcdonald from the Real Estate Institute, says what's driving up house prices is simple - an excess of demand over supply.
"We have got a definite shortage of good properties on the market. The seasonal summer listings that we normally see at this time of year have been slow coming on because of the weather."
"Lower interest rates are also encouraging potential buyers."
It's a housing rebound that at least one economist calls scary and depressing.
Dr Ganesh Nana, the BERL Chief Economist says we have we not learned any of the lessons of the past.
"We cannot survive on a property bubble. We cannot survive on an economy based on property."
Ganesh Nana's concern is shared by the Reserve Bank, which warned two days ago against a return to a debt fuelled housing cycle.
Turnover is down. There were 500 fewer homes sold last month compared to the month before. But the 6,091 figure is still well up on the 4,500 that were sold this time last year.
Wellington is the best performing region - the median price there up 12 per cent on a year ago, followed by Canterbury, Westland and Auckland.
Two regions fell - Northland by almost 8 percent and Southland's the biggest loser.
But Mcdonald still claims the steady return of house values overall is proof that property is once again the best investment.
"The family home I think at the very worst has dropped seven per cent. But now it has recovered right back to where it was at the peak."
But the best investment claim is a bold one.
It is one that economists warn could be debated long into the night.
Gareth Morgan says property is undoubtedly a good investment, but that's helped by tax breaks that favour property over other investments.
Bryan Gaynor points out the banks are also more willing to lend people money to buy property, rather than to buy gold or shares.
And they say the outlook for property's also uncertain.
The government's now reviewing the tax break rules.
In the long term, nobody is sure what will happen to prices when the baby boomers start retiring and looking for smaller homes in which to live.
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