The steady life in sales and prices started in the central Auckland suburbs over a year ago and has now spread across the new supercity. But as Bruce Morris reports, it's still tough going out in the provinces.
Winter is meant to be dull in the world of real estate, with low sales, flat prices and everyone waiting for the first daffodils to stoke a bit of interest.
Not this winter, though - well, not in Auckland anyway. The open homes and auction rooms have been packed, sales levels are at five-year highs, investors are back to deal... and the gap continues to widen between the Queen City and the rest.
In a sellers' market, Auckland-wide sale volumes over the winter were back at 2007 levels, and values in many suburbs continued to rise well above those peaks. As mortgage rates stay low, it seems only a substantial lift in listings through the spring and summer will settle prices.
But this is still essentially an Auckland thing. While much of the world continues to fret about Europe, China and the United States, fickle buyers elsewhere in the North Island have remained in command and conditions range from so-so to awful.
Only in Hamilton is the market reasonably balanced.
As the brittle New Zealand economy steadies, the key questions now are: how long will the Auckland surge continue, and will the others ever eat away at the gap?
What we are seeing is pure supply and demand - stoked by internal migration, much of it from Christchurch, and under-pinned by very low mortgage rates and a lack of new residential developments.
In Auckland, prices during the 2002-2007 boom didn't rise as much as they did in many provincial areas and, spurred by the constant population growth in search of opportunity, are now getting their own back.
Meanwhile, out in the provinces, it's flat at best, with Hamilton offering the only encouragement.
While prices in all but a few pockets of the new supercity are comfortably above the highs of 2007 - with some of the central suburbs up between 15 and 24 per cent - the upper North Island provincial towns, cities and suburbs are all in the red. Many are down by more than 20 per cent.
The issue everywhere - whether in bubbling Auckland or the stagnating provinces - is that New Zealand house prices remain very high in relation to local wages and household income. They are among the most unaffordable in the world.
The present Auckland spurt is on the back of record low mortgages, which are likely to continue to have a positive impact on sales and prices through into next year. But if Europe can find some answers, China and the US return to stronger growth and the New Zealand economy starts to move, interest rates will rise and perhaps quite quickly.
What will happen then? In those conditions, with continued pressure on wages, surely it is too much to expect further substantial growth from the platform of over-valued properties.
A mortgage rate rise is like a wage cut, although a decent fixed-term will offer protection. In buoyant Auckland, prices may settle and perhaps drift back for a spell, even with the support of migration and low building levels. But in the provincial towns and cities there is not the same growth and opportunity. If prices are flat now, well down on the levels of five and six years ago, how can higher interest rates be other than stifling?
In the middle of the mix are investors, who have been encouraged back by cheap money and flat provincial prices offering good yields. Even Australian investors are sniffing around beyond Auckland, taking advantage of the high cross rate between the Australian and New Zealand dollars. But anyone in it for net short or medium-term capital gain is risking problems.
The investors are also back searching in lower-priced Auckland, but they tend to be professionals looking for a way of increasing yield through sub-division or some other device rather than mums and dads hunting for a "renter".
Another factor hovering over the market is the chance of a tightening of lending criteria, which the Reserve Bank has already flagged as a possibility. A demand for bigger deposits would have an immediate impact on sales and then prices. Add to that the spectre of a capital gains tax under a Labour government.
Whatever happens, it is difficult to see anything other than a continued widening of the gap between Auckland and the upper North Island cities of Whangarei, Hamilton, Tauranga and Rotorua, in the short term at least. The "new relativities" may mean Auckland median prices settle at something like 80 to 110 per cent above the sister cities, rather than the traditional 75 to 100 per cent suggested by Real Estate Institute statistics of the past 20 years.
The winter's warm glow to sellers in Auckland followed a quiet two or three years of hunkering down as the global financial crisis went through its cycles.
The central suburbs were the first to start making real gains about 18 months ago, ending a patchy period where cautious buyers were taking their time to find value.
But the confidence really returned from the spring of 2011. In the central city suburbs, and especially with character homes, a flood of buyers chasing limited listings created a sellers' market.
Since then, the North Shore has joined the party, and general appreciation has flowed to the south and west in a more uniformed way.
The volume of sales and the number of days taken to sell homes are great indicators of strength, and the winter Real Estate Institute statistics for Auckland point strongly to a market that is bouncing along nicely, quickly gobbling up the listings.
August figures are still being settled, but sales for the three winter months probably nudged 2400 - around the same levels reached in mid-2007 when prices were touching their peaks.
Further encouragement comes from the indicator showing the time taken to sell the average home this winter, which should be around 31 days when the statistics are settled. That is as low as it has been since the winter of 2007 and a vast step up from the awful 50 days of 2008.
While the overall trend is definitely up, agents and valuers report that parts of the market can still be a little patchy. However, as the figures in the central QV data pages of this Property Report reveal, just 15 of the 153 city suburbs showed price drops in the three months to the end of June, and anecdotal evidence suggests the momentum has now slowed since then. In contrast, 65 of the 118 towns and suburbs north of Turangi declined in the quarter.
"I don't think it is strong and pumping across the whole city," says QV valuer Jan O'Donoghue. "But we are certainly seeing steady increases ahead of wage growth, primed by very low mortgage rates.
"The rises have been most noticeable in the central suburbs for all the traditional reasons - handy to transport and jobs, close to the CBD, good schools, pleasant neighbourhoods, nice homes and decent-sized sections. And that demand in the central suburbs from a rising population has now spread to other parts of the city."
O'Donoghue is not willing to predict how long it will continue. But until interest rates start to shift up - and assuming there are no nasty economic surprises on the horizon - she can see no downward pressure on prices.
So, supported by the low interest rates, the rest of 2012 is looking bright for Auckland, even if prices may be cushioned a little by a rise in listings.
The star suburbs haven't changed lately: Grey Lynn, Westmere, Kingsland, Ponsonby and Sandringham have been up there for the past year. But they've been joined by a swag of other central city areas enjoying quarter price growth above 3 per cent, with many of them 12 to 20 per cent and more above the 2007 market highs.
Blue chip Herne Bay, St Marys Bay and Epsom also continue to shine and homes are drawing multiple offers, though properties at the upper levels - above $2 million and $3 million, say - are not enjoying quite the same percentage price rises. More expensive homes in most towns and cities are suffering similarly.
Diana Buczkowski, a leading Barfoot & Thompson agent specialising in Epsom, says top-end properties are the last to move in a cycle and now offer excellent buying opportunity for buyers looking to "move up".
Generally, she sees steady growth ahead and notes that listings and momentum are starting to build as spring arrives.
"But buyers want to see the value and, where properties don't tick all the usual boxes, the demand will not be so strong," she says, adding that some vendors can hold unrealistic expectations on market value.
Over in Herne Bay and Ponsonby, Ray White co-principal Simon Damerell operates in one of the country's gilt-edged patches, with the average Herne Bay house now valued by QV's E-Valuer at a shade over $1.87 million (against Epsom's $1.15 million).
As values in surrounding suburbs such as Westmere (average value $1.015 million) and Grey Lynn ($910,000) are pulled along by their classy neighbours, Damerell says more "in-demand" suburbs have been created in an ever-expanding city.
"In the past, suburbs like Grey Lynn and Westmere might have been seen as a 'stepping stone' into Ponsonby or Herne Bay," he says. "But the transitional suburbs have now become destination suburbs in themselves."
The same point can be made about Pt Chevalier, Mt Albert, Western Springs and Kingsland, which are starting to join Mt Eden and Epsom as city-fringe "destination suburbs".
Out west, Te Atatu Peninsula has continued to make strides and all but Ranui, Kelston and Sunnyvale now have their noses in front of the 2007 highs. Down south it's a contrasting mix. A quarter of the suburbs are still down on those peaks, but places such as Botany Downs, East Tamaki, Golflands, Half Moon Bay, Highland Park, Northpark and Pakuranga are doing well.
Across the harbour bridge there have been widespread gains over the past six months, with Chatswood, Forrest Hill, Hillcrest and Sunnynook standing out and leaving just Campbells Bay and Castor Bay below their market peaks.
Further north to the old Rodney towns and suburbs, it's more sluggish and, despite a general lift this year, most areas are still below the 2007 highs.
When you see those headlines proclaiming a boom in Auckland house prices, it's worth remembering that Auckland these days stretches from Wellsford to Waiuku and what's going on in one area may not be happening in another. Indeed, depending on the property, even the same street may produce different results.