Rate of growth ‘simply can’t go on’

Wellington house prices have jumped by nearly a quarter in the year ending June, the largest increase on record, data from the Trade Me property price index shows.

The average asking price on the website for properties in the region hit a record $864,000, a 24 per cent jump on June last year and an increase of $166,300.

‘‘June marks the fourth consecutive month where we’ve seen property price growth of 20 per cent or more in Wellington. The fact is, [it] is now running hotter than any other market we’ve seen before, including Auckland,’’ said Trade Me Property sales director Gavin Lloyd.

Prices were driven by a lack of supply in the region. The number of houses for sale in June was down by 13 per cent on the same time last year.

Central Wellington had the smallest yearly growth in prices of all Wellington districts, climbing 15 per cent to a record $943,900.

Buyers were looking further afield in search of cheaper houses in exchange for a longer commute, Lloyd said.

South Wairarapa experienced the biggest price jump in the region, where the average asking price grew 39 per cent to a new high of $784,550. New highs were also seen in Carterton and Lower Hutt, and on the Kapiti Coast.

Lloyd said the growth rate was unsustainable despite there being no signs of the market slowing down.

‘‘This huge price growth simply cannot continue forever.’’

Auckland house prices grew 16 per cent in the year ending June, to an all-time high average of $1,089,300, with the central suburbs jumping 13 per cent to $1.2m.

The national average asking price on the site also had the largest yearly increase in June, climbing 18 per cent to an all-time high of $826,200

Lloyd said every region in the country apart from Gisborne, Northland and Otago reached a record average asking price in June, with many experiencing strong doubledigit growth.

Small houses with one or two bedrooms had the most price growth, now costing 23 per cent more, with an average price of $624,900. Townhouses were the most popular urban properties, with average prices rising 22 per cent.

The Trade Me Property price index measures trends in the expectations of selling prices.