An economist thinks Wellington's house prices have peaked

The capital is ranked second worldwide for house price growth, in the Bayleys Knight Frank Global Residential Cities Index.

Its median sales price jumped 33.5 percent to 1.1 million dollars .... in the year to September.

Turkey's Izmir took the top spot -- although its prices are vastly different, with an average apartment costing 72-thousand dollars.

Independent economist Tony Alexander says he expects Wellington's prices to fall slightly next year.

He says especially with the credit crunch, a lot of young buyers will be looking elsewhere.