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FEARS that the housing market was starting to slow down have been misplaced as house prices in New Zealand have shot up 22 per cent - the biggest leap in 20 years.
Price figures for last year show a boom, particularly in the South Island, Quotable Value New Zealand reported.
Nelson was up 41.6 per cent, Dunedin 34.3 per cent, Invercargill 33.4 per cent and Christchurch 27.4 per cent.
Napier prices rose 32 per cent while Auckland prices continued to boom, 22 per cent up on a year ago.
In Wellington city, house prices rose 18.7 per cent.
The index is the most accurate measure of house price changes. Quotable Value spokesman Blue Hancock said few areas experienced growth of less than 10 per cent in 2003.
The index had increased in 10 successive quarters, but there were signs the market was slowing.
"Reduced net migration, house prices outstripping income growth, interest rate increases and increasing construction costs are likely to impact on house prices in the coming year," he said.
Deutsche Bank chief economist Ulf Schoefisch predicted house price inflation would slow to about eight per cent this year and to about zero-in 2005.
Median sale prices rose in six regions and fell in four. The median in Waikato/Gisborne/Bay of Plenty was up from $l88,000 to $192,500 in February; in Manawatu/Wanganui it rose from $122,000 to $127,000; in Taranaki it was up from $140,500 to $146,500.
Hawke's Bay slipped from $190,000 to $185,000, and Northland, Auckland and Nelson/Marlborough also experienced falling prices.
The residential property market in Taupo has enjoyed good growth over the past year with median sale prices for both dwellings and sections climbing as the demand for new and existing residential property intensifies.
In the December quarter, Taupo's median dwelling sale price was $284,500 - up 44 per cent from the same period last year, according to Real Estate Institute of New Zealand (REINZ) statistics.
Section prices have also shown substantial value growth achieving a median sale price of $167,167 in the December quarter - up 72 per cent from the same period last year when the average section price was $97,500.
Properties have been selling at a faster rate as REINZ statistics for the December quarter show that residential dwellings were on the market for only 33 days on average, down from 42 days in the same period last year.
Demand has driven residential dwelling prices up and pulled average days on the market down.
Taupo's residential market is forecast to remain buoyant over the next 12 months.