House price increases possibly “peaked” — expert believes

Press, 13 December 1989, Page 61

House price increases possibly “peaked” — expert believes

In the wake of f $9OOO increase in the averse median price of a Canterbw house in the last ten month; the local head of the Real Este Institute is taking a cautiousstance on future rises. 1

In January of this year the median house price pivailing in Canterbury was s|,ooo, in October this had risen to $89,000. There are two like culprits for this rise accordig jto Mr Roger Stark. ;

One if the general tming up of property prices thathas been stronger in the South land than the North, the other facoii is the return of buyer interet at the top end of the market.

The impact of even aew sales at the top end of the mrket can be to rise the overall ‘hioothed out” median price sigriicantly. Nor has the entire jar been one of bullish figuresfor property sales in Canteiury Mr Stark noted. | “January through to‘une was

pretty static overall, it was July onward that the market really came to life again,” he said.

Neither has the trend been a completely upward one. The number of sales in August in Canterbury of 1272 was 12 above the total for October of 1260.

Mr Stark suspects that October may well have represented a “possible peak” for the trend. With public awareness of increasing property prices comes a stage where, “The expectations of the sellers rise above the realities of the market, and you hit a plateau,” Mr Stark said.

In addition he believes that the widespread perception that interest rates have firmed again will also take some of the buoyancy out of the market. “Quite possibly there will be a small slowdown going into the New Year.” “This will however enable the market to catch up with the current shortage of listings.”

One trend he is sure of is his

overall impression that the South Island is doing much better than the North in the property stakes at present. “The South Island appears to have remained immune to the extreme highs and lows of the North, the property market here is built on reality and there is not the same ‘yuppie’ factor to consider.” ' ; , Mr Stark was reluctant to enter into any greatly detailed predictions of the possible directions of the property market in 1990.

“While overall I see the industry in good shape next year I am also certain it will be one of the liveliest years in real estate for a long time,” he said. The spectre of deregulation of the real estate industry next year does not cause Mr Stark much concern however.

“This is a highly competitive industry, as it is currently, and I doubt there are many innovations that could be introduced that the industry has not already tried and tested,” he said.