Market forces are driving Auckland residential property prices higher, and few forecast any sudden fall in prices within the next six to 12 months.
As the outgoing Real Estate Institute chief executive Helen O'Sullivan says, higher Auckland prices are a reflection of the market, not the driver. And even the Reserve Bank appears relatively comfortable with current interest rates and the fact that the rate of house price increases has halved over the past year.
Whether hopeful first-home buyers are as sanguine about the current situation in Auckland is another matter. Economists say more first-home buyers would have entered the market if the Reserve Bank had lifted its low equity mortgage restrictions last month, but for the moment their prospects of getting into their own home are poor.
With low-equity fees and other costs, a couple looking to get into their first home must now find an extra $100 a week to fund a mortgage on an average Auckland
home, compared with their situation a year ago. In addition, the first-home buyers are competing with investors and other well-cashed-up buyers for their new home.
Some of those cashed-up buyers have benefited from the rapid increases in values recorded during the past two years.
The prospects for first-time buyers are daunting, although the trading banks have cautiously increased lower equity lending during the past 12 months, and brokers say the banks have scope to continue lending to that sector. Meanwhile the gap between prices in Auckland, and to a lesser extent Christchurch, and the rest of the country, continues to widen.
Economists and others warn the Auckland housing bubble bursting poses a significant risk not only to the Auckland economy, but to the entire country. Among them is the University of Canterbury's architect in residence and urban commentator Tim Nees, who has questioned whether one city should be encouraged to grow to the point where it dominates the national housing market, and whether that dominance should be "rebalanced".
"This may involve investing in other cities and regions to attract quality development that may then ease the pressure on Auckland," he says. " The effects of the bursting bubble are a risk not just for Auckland but for the whole country." Nees says a long-term sustainable vision for housing is required, one that is supported by the government, that is fair to all levels of the market, and that works at a national level.
Ongoing efforts to curb Auckland house price increases, including a big boost in the construction of new homes, will not come on stream in significant numbers until well into next year.
So the imbalance between Auckland and the rest of the country is set to continue, at least for the foreseeable future, and there appears to be little political appetite to address it.