House prices will force rate rise say economists
5:00AM Friday April 20, 2007
By Anne Gibson
The late-summer surge in the super-heated housing market was yesterday greeted with resignation by economists who predicted another interest rate increase next week.
Real Estate Institute sales figures showed a $13,000 jump in average Auckland sale prices in one month - rises of more than $400 a day.
The Auckland median sale price of $430,000 in February climbed to $443,000 last month, although some individual suburban results were patchy.
Prices fluctuate because of fewer sales or several lower-priced sales in one period. But overall, the national median climbed by $8500, from $335,000 to $343,500.
The number of sales rose from 9357 deals in February to 10,989 last month.
Goldman Sachs JBWere research director Shamubeel Eaqub said the extremely strong market was certain to prompt the Reserve Bank to raise its official cash rate next Thursday.
ANZ's economic review said the latest jump might have been caused by people deciding to buy sooner, rather than later, and avoid any further interest rate rises.
The bank said it was surprised by the continuing strength of the figures.
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