House sale volumes have hit a five-year high in the wake of booming prices.
The Real Estate Institute released its monthly report today showing sales up 24 per cent in a year. More than 7400 houses, worth $3.6 billion, were sold in November.
Harcourts chief executive Hayden Duncan said the soaring property market of central Auckland - which has this year pushed prices to record highs - was spreading to all parts of the city and even affecting provincial New Zealand.
"We would have suggested that [it was mainly central Auckland] up to last month, but it has spread more widely now. It's in the west, south, north and east," Mr Duncan said. "Most companies have just recorded their highest sales volumes, or close to them, in their histories."
Reinz housing market
Government valuer Quotable Value also released its monthly property value index today, showing that nationwide residential values have risen 1.9 per cent over the past three months and 5.7 per cent over the past year.
Reinz figures showed sales volumes, and prices, increasing in 21 out of 24 areas in Auckland. Glenfield, Milford, Takapuna, Henderson, Mt Albert, Ellerslie, Panmure, Manurewa and Papakura all increased their sales by at least 30 per cent compared to November last year.
The report said 40 per cent of all sales were in Auckland, or 53 per cent by value. There were almost $2 billion worth of residential sales in the city last month.
Meanwhile, median house prices reached new record highs in Auckland, Otago and Canterbury.
The institute's chief executive, Helen O'Sullivan, said there had been a surge in new listings during spring but it wasn't enough to meet demand. "The activity in the Auckland market is now starting to see some spill-over into other parts of the country."
A trend to sell at auction had also become more widespread, she said.
A new national record was also set for the highest percentage of sales by auction, at 21 per cent. In Auckland, almost 39 per cent of sales were by auction.
"We are seeing something of a change in the way that both buyers and sellers are approaching the market," Ms O'Sullivan said.
Properties sold in November 2012
QV said nationwide residential values were now 1.5 per cent above the previous market peak of late 2007.
"The increase in nationwide values continues to be driven primarily by Auckland and Canterbury where demand continues to outstrip supply," said research director Jonno Ingerson.
"Across the rest of the country values have been steady or increasing very slightly over the past six months. However in the last month or two many of these areas have begun to falter."
ASB Bank economist Jane Turner described the November REINZ house stats as "reasonably steady" in November, after the 18 per cent October surge.
"Housing turnover has picked up steadily over the past year, as confidence has returned to the housing market underpinned by expectations of low interest rates and gradually improving household confidence," said Turner.
"Listings data suggest house sales may be constrained by low supply, particularly in Auckland. This implies that demand could be stronger than the level of turnover suggests. Nonetheless, the median days to sell remained unchanged on a seasonally-adjusted basis. This is generally a good guide on the balance between supply and demand in the market. "
Turner said the relatively steady trend over recent months suggested "some stabilisation in the market. As an indicator of prices, days to sell suggests the annual pace of house price inflation could be close to peaking."
The REINZ stratified house price index increased 0.9 per cent (seasonally adjusted) over the month and was up 7.3 per cent on year-ago levels on a nationwide basis.
"Auckland continues to lead the increase, with prices 13 per cent higher on year-ago levels. Price increases in other areas are much more modest, but the trend suggests the pick-up in the housing market is broadening to other regions of the country."
Turner said she expected the Reserve Bank to leave the Official Cash Rate unchanged until September next year.
O'Sullivan said a drop-off in sales during December and January was likely as the holiday season disrupted auctions. Although such declines were annual, this year might see a more pronounced effect because of the higher percentage of auctions.
Sales volumes dropped by half in 2008, from previous highs, at the onset of the economic downturn. But prices fell by only 11 per cent, according to the institute's figures.
So when a housing shortage squeezed the Auckland market this year, prices quickly rose beyond previous records.
Mr Duncan said he had been expecting a housing shortage for the past two years, and it was now so severe that even if action were taken today it would take two to three years to alleviate it.
"But the Government has done nothing to outline a detailed plan," he said. "People who are thinking about purchasing and want to understand or consider what's going to happen in the future, have to face housing prices only becoming stronger and the number of homes available becoming fewer."
Ms O'Sullivan said the institute had noticed a conservatism in the market despite its surge, with fewer investors buying properties.
People were not as leveraged as they had been during last decade's boom, she said.
Mr Duncan said 31 per cent of Harcourts' sales last month were to first-home buyers, up from last year.
The Government in October pressured local councils to open up more land in response to the Productivity Commission's report on housing affordability.
Last month the opposition Labour Party announced a proposal to build 100,000 homes on Government land.
Auckland is said to need 10,000 new homes every year to keep up with demand. Mayor Len Brown has said there is land available to build 18,500 homes but finance is a stumbling block.