House prices are booming around New Zealand - with the average price of an Auckland city home rocketing to $735,692, up 12 per cent over the past year and nearly 8 per cent on the 2007 peak.
Experts say there is no sign of the market slowing soon, and one commentator forecasts the average price in Auckland could hit $1 million within three to four years.
The new figures come as Auckland Council and the Government strike a deal to fast-track plans to free up land for residential department.
Prime Minister John Key, Mayor Len Brown and Housing Minister Nick Smith will announce the arrangement today after six weeks of talks aimed at breaking an impasse over Auckland's housing crisis.
Properties purchased as recently as 2011 are selling for hundreds of thousands of dollars above their valuations, despite no renovations being done.
More than 50 properties in the region sold for $4 million or more in the past 12 months.
Quotable Value operations manager Kerry Stewart said that in parts of the city, demand was so high that there was "little opportunity to delay making offers".
"The likelihood of it slowing down is slim ... With the continued surplus of buyers and lack of properties on the market to meet the demand, prices are still increasing.
"As a result, buyers are broadening their property search to areas away from desirable suburbs and looking more at the fringe of the city. Again, this is causing prices to increase rapidly, with areas such as Blockhouse Bay and New Lynn achieving prices previously unseen for years."
Economic commentator Bernard Hickey said the average price could hit the $1 million mark in three to four years if it continued rising at a rate of 10 per cent a year, a lack of new homes remained, migration rose, investment rates stayed at 5 per cent, and the Reserve Bank did not restrict high loan-to-valuation loans.
"I'm not saying it will happen, I'm saying it could happen if we see those pre-conditions met. There are lots of variables."
The Reserve Bank moved this week to dampen the market by moving on the four big banks so they will need more capital to back mortgages with smaller deposits.
BNZ chief executive Andrew Thorburn said the main issue driving Auckland's rising house prices was the lack of supply to meet the demands of a growing population - which was a long-term issue.
Meanwhile, marketing campaigns are getting shorter, with real estate agents cramming in several open homes in the space of two weeks. Hundreds of buyers are looking through the homes and overseas buyers are getting family members to look for them and purchasing without having stepped foot inside.
House-hunters flocking to central Auckland suburbs such as Grey Lynn have pushed up the price. A run-down four-bedroom property at 115 Crummer Rd reached $1,455,000 last week - 50 per cent above its valuation of $980,000.
LJ Hooker agent Dee McDade said it was a record price for a do-up in the area.
The former owner bought it in June 2011 for $1.11 million, so made a $345,000 profit in less than two years without any renovating.
There were 18 registered buyers for the auction, after a two-week marketing campaign which also attracted overseas buyers.
North Shore prices were not far behind those in Auckland city, with an average house price of $730,112, 12.7 per cent up on last year and 13.8 per cent on the 2007 property boom.
Waitakere, Manukau, Papakura, Franklin and Rodney also all jumped. The total Auckland region has an average price of $628,205, 12 per cent up on last year.
Other main centres like Christchurch, Wellington and Hamilton are also flourishing and the trend is slowly starting to filter to the provinces - although most areas don't compare to the 2007 property boom.
There is renewed confidence in areas such as Tauranga, where growth has been limited in comparison to other major cities.
Prices rose 1.2 per cent in three months - the city's average price is now $428,908 - compared with an increase of 1.7 per cent and a price of $347,406 in Hamilton.
Valuer Paul Thomas said there were indications Aucklanders were moving to Tauranga to work - "something that has been notably absent for the past few years. This may help the market lift even further."
Nationally, values are up 4 per cent on 2007 and 7.1 per cent in the past 12 months, with a $431,967 average.
Real Estate Institute chief Helen O'Sullivan said the main way to cool the market was to build more houses.
82 College Hill, Freemans Bay
The former owners of Auckland Central MP Nikki Kaye's office made $115,000 in less than a year.
But if the property - in a prime location just minutes from Ponsonby Rd - hadn't been zoned for commercial use, that figure could have doubled, says the real estate agent.
Ms Kaye and her staff have the lease on the property for three years, with an annual rent of $39,100.
Real estate agent Michael Boulgaris said the property was sold for $825,000 to a young couple last month.
It had a capital valuation of $710,000.
Eleven months earlier, an investor with a large Auckland portfolio had purchased the property for $710,000. He had bought it while it was zoned for residential use and turned it into commercial use, meaning buyers could not live in it. No renovations were made.
"In the Herne Bay/Ponsonby/Freemans Bay market, local values have jumped up 30 per cent in value over the last two years," Mr Boulgaris said. "So really that wasn't a big jump. They probably could have got another $100,000 out of it, if it was a family home."
115 Crummer Rd, Grey Lynn
This run-down home shocked real estate agents when it reached $1,455,000 at auction.
The four-bedroom property went for nearly 50 per cent above its valuation of $980,000.
The former owner bought it in June 2011 for $1.11 million, so made a $345,000 profit in less than two years without doing any renovations. He had been living overseas and renting the house out to family members.
It was bought by Auckland art teacher Belinda Wilson and her husband, who are moving from Mt Eden and plan to renovate the home, starting with an art gallery and studio downstairs for her students.
Pictures taken inside show 1970s-style carpet and clashing wallpaper. The outside is in need of a paint job.
The 1900s weatherboard villa, which has one bathroom, has a floor area of 151sq m and sits on a section of 556 sq m. It has no garage, only a carport for one car.
But it has views towards Coxs Bay and is within the zone for Auckland Girls Grammar, Western Springs College, Kowhai Intermediate and Grey Lynn School.