House prices nearing 2007 peak

Auckland City house values will shortly top the market peak of 2007 in real terms as a red-hot property market pushes up prices.

The real estate market will enter the traditionally quiet Christmas-New Year period with booming prices and record sale volumes.

Auckland house values are up 3.2 per cent in the past three months and 9.3 per cent in the past year, according to QV figures released yesterday.

Suburbs within the old Auckland City boundaries have led the charge, with values surging by 10.7 per cent over the past 12 months.

When inflation is taken into account, old Auckland City values are now just 1.1 per cent below the 2007 property peak.

With strong demand and a continued shortfall of listings, the high-tide mark is expected to be reached within a couple of months.

"Whilst there has been an increase in listings, demand continues to outstrip supply, particularly in central Auckland," said QV operations manager Kerry Stewart.

Accessibility to the city was a key factor for many buyers, but with people forced to look further afield values were rising in North, West and South Auckland.

"Due to sellers having to buy in the same market, they're not listing their properties as readily," Ms Stewart said. "The upper end of the market is taking longer to sell, however well-presented houses around $600,000 are selling very quickly."

Nationwide, values are up 1.9 per cent in the past three months, and 5.7 per cent in the past year. Jonno Ingerson of QV said the rise was driven mainly by Auckland and Canterbury.

Values over the rest of the country were steady, but had begun to falter in some areas in the past month.

"Outside Auckland and Canterbury the property market remains subdued as buyers are generally cautious, and there are few quality properties ... to choose from."

Yesterday the Real Estate Institute released its monthly report which showed house sale volumes hitting a five-year high. The report showed sales were up 24 per cent in a year. Sales volumes and prices increased in 21 out of 24 areas in Auckland.

* Nationwide+1.5 per cent (-11.3 per cent when inflation-adjusted)

* Wider Auckland +10 per cent (-4.1 per cent when inflation adjusted)

* Old Auckland City+13.4 per cent (-1.1 per cent when inflation adjusted)

Source: QV.co.nz