Gloom merchants will be disappointed with numbers

The housing market continues to demonstrate an underlying strength and while it may plateau over winter, particularly with mortgage interest rates rising, "come spring we suspect the market will be in good shape again," Woodley says.

The Reserve Bank’s decision earlier this month to raise interest rates for the third time this year was "a blow" to homeowners and those paying off mortgages as a form of personal saving, he says.

The central bank raised its official cash rate from 5.5% to 5.75% and is expected to raise rates further later this year.

"Many people struggle with the concept that New Zealand has to have some of the world’s highest mortgage rates in the name of controlling inflation to below 3%, especially when the price of this is to sacrifice economic growth," Woodley says.

The latest Real Estate Institute figures show the national median house price rose from $242,000 in April to $248,000 in May. That was up 18.1% on the $210,000 national median price recorded in May last year.

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