House prices continue rise

Median house prices in Otago and Dunedin continued to climb during May, but Queenstown Lakes booked a 7% decline to $820,000, being overtaken by Wanaka prices for the first time in more than a year.

New Zealand prices overall gained $27,000 to hit a record $562,000.

The Clutha district was a standout region south of the Waitaki in May, prices leaping almost 25% to $190,000, while the number of houses sold there rose from just 15 in April to 42 in May, Real Estate Institute of New Zealand data shows.

Wider Dunedin city, including Mosgiel, Taieri and Waikouaiti hit a record $409,000.

The median house price in Wanaka rose 0.5% to $865,000.

Wanaka's $865,000 was its fifth-highest median price, $900,000 having been struck in June 2016.

While the number of houses sold nationally in May rose 1.3%, from 7482 a year ago to 7578, several regions booked declines, Tasman falling 16.9%, Marlborough down 10.4%, Otago down 7.4% and Northland decreasing 6.6%.

REINZ chief executive Bindi Norwell said while 2017 saw only year-on-year volume decreases nationally, it was positive that in 2018 the number of properties sold had increased year on year for four out of the first five months of the year.

"Further supporting this positive outlook is that across the country nine out of 16 regions saw a year-on- year increase in the number of properties sold, with four of those regions experiencing double-digit growth," Ms Norwell said.

Those four were Nelson (up 25.3%), West Coast (up 20.9%), Gisborne (up 15.8%) and Hawke's Bay (up 12.5%).

Sales in Dunedin and Queenstown for the rest of winter are expected to be "pretty constant" and "steady", commentators say.

REINZ regional commentator in Dunedin Liz Nidd said Dunedin sales numbers "have remained pretty constant" heading into winter.

"First-home buyers are becoming more organised with their funding, due to banks being tough with lending," Mrs Nidd said.

Because rental returns remained high in Dunedin, investors were still interested in the market, she said in a statement.

She noted "home and income" properties were still "incredibly sought after".

REINZ regional director in Queenstown Gail Hudson said while Wanaka prices had increased 0.5% to $865,000, prices had otherwise softened across Arrowtown, Queenstown and Wakatipu.

"There's still strong interest in the area and a good number of of cash buyers around," Mrs Hudson said.

She expected the market in Queenstown Lakes would "remain steady" over the coming winter months.