Industry cautious on 'boom' label

Peter Thompson, managing director of Barfoot & Thompson. Photo / Kenny Rodger

A pick-up in the property market is the result of having more buyers than listings, and it's too soon to say the market is facing a boom, real estate agents say.

"I would definitely come short of calling it a housing boom," said Real Estate Institute president Peter McDonald.

"I think it's just a correction back to where it was before the recession. It's a reflection of a shortage of listings and a little bit more demand than there is supply, which will correct itself coming towards Christmas.

"The number of days to sell has certainly shortened, but that's because there's a shortage of stock on the market ... It's supply and demand.

"At the moment there are more buyers than there are listings and that's why the market is strengthening."

More buyers were appearing because confidence was returning to the economy and because interest rates were still relatively low but predicted to rise, Mr McDonald said.

Figures expected to be released today would show sale prices for October to be the highest they had been in 10 years, he said.

House sales had dropped from 10,000 a month in better times to about 4000 at the market's worst. They were at about 6000 last month, Mr McDonald said.

Barfoot & Thompson managing director Peter Thompson agreed there was no boom.

Sales traditionally rose at this time of year, and he put the increase down to the market recovering after a sudden fall in sales, which had increased demand and therefore prices.

"It's a combination of timing plus the economy slowing down and recovering and confidence coming back into the market.

"I wouldn't say it's going back into a boom ... but certainly the volume of sales being made is double that of last year."

Mr Thompson said more properties - including higher-valued ones - were now being sold, which was to be expected in the lead-up to summer.

"Traditionally more higher-priced properties sell because of swimming pools and tennis courts, so it's partly the market and also partly the recovery."

Mr Thompson said homes were selling in an average of 31 days, about the same as two years ago.

Last year, that figure was up to an average of 44 days.