Prices and costs

House prices, building costs, homeownership and rental costs.

House prices

New Zealand house prices continue to increase. The Quotable Value (QV) quarterly price index showed a 9 percent decline in December 2008.

Graph of annual increase in house prices.

_{Source: Quotable Value Limited}

The Real Estate Institute of New Zealand (REINZ) house sales data also showed an annual decline in median sales price since April 2008 but this decline has continued as 4 percent to $335,000 in March 2009. The median number of days it takes to sell a house was 44 days in February 2009 compared to 40 days in March 2009.

The value of New Zealand’s total housing stock increased from $614 billion in the December 2007 quarter to $508 billion in the December 2008 quarter. However, the value of the housing stock decreased in the September 2008 quarter to $582 billion, falling by 4.7 percent compared with the September 2007 quarter. This continues from the first annual fall in June 2008 of the estimated value of housing since the fourth quarter of 1991.

Building costs

The Statistics New Zealand Capital Goods Price Index (CGPI) measures movements in price of various fixed capital assets in the economy. In the December 2008 quarter, the highest CGPI construction category increase from the previous quarter was for construction other than buildings. In the year to December 2008, the CGPI increase for residential building was 2.9 percent, the increase for non-residential building was 3.0 percent, and the increase for other construction was 5.5 percent. The increase for the overall CGPI (that is, for all industries) in the year to December 2008 was 4.1 percent.

Graph of the cost of building and construction.

_{Source: Statistics New Zealand}

Homeownership and rental costs

Inflation in the housing sector is largely measured by movements in the ‘housing and household utilities’ group of the Consumer Price Index (CPI), and had been increasing steady at about 5 percent per annum in the quarters between December 2005 and June 2008. However, housing sector inflation is flattening. Inflation for this group was 3.6 percent in the March 2009 quarter compared to what it was a year ago.

Inflation in the price of new housing has slowed, and was 3.1 percent in the year to December 2008, falling from 4.6 percent in the year to the September 2008 quarter.

Rent inflation continues to be lower than general price inflation. Actual rents for housing increased by 3.0 percent in the year to December 2008, slightly less than the rate of increase as for the year to September 2008 (3.1 percent). General price inflation (as measured by the CPI all groups) was down to 3.4 percent in the year to December 2008, compared with 5.1 percent in the year to September 2008.

Graph of consumer price index.

_{Source: Statistics New Zealand}