A surge in the number of people applying for mortgages last month is further evidence New Zealanders are back buying property, say real estate experts.

Credit bureau Veda has released figures which show a 25 per cent jump in the number of mortgage applications last month compared to January 2011.

Banks and other lenders obtain a credit report and data from Veda as part of the mortgage application process.

The figures come after January statistics from the Real Estate Institute of New Zealand (REINZ) which showed residential house sales grew by 25 per cent compared to the same time last year.


Veda managing director John Roberts said there was a sense that people had accepted a still-struggling economy as the "new normal".

"They just have to get on with their lives ... this is good for New Zealanders and it is good for the economy."

When broken into generational bands, the Veda data shows younger and first-time house buyers are back entering the property market.

January saw a 39 per cent increase in Gen Y (under 28) mortgage applications, and Gen X (28-43) applicants were up by 29 per cent.

Applications by Baby Boomers grew by 18 per cent.

BNZ chief economist Tony Alexander said he would expect house sales to continue to grow this year given low interest rates were set to continue.

New Zealanders - particularly the young - were "getting on with their lives", he said.

"A lot of people have put their lives on hold as quite naturally, they've looked at what's been happening around the world and gone, 'I'm just a bit uncertain, we'll see what happens'."


REINZ chief executive Helen O'Sullivan said prices were relatively stable, broadly speaking.

However, she said longer-term prices could only go up without more properties being built, a shortage that would be felt particularly in Auckland.

"We would love to see some more product being built.

"If you look at the consent figures for the last three years, I think it's around 60 per cent of the long-run average."

Barfoot & Thompson managing director Peter Thompson said prices in Auckland could see a slight increase of around 2-5 per cent over the next 12 months.

"I think people have finally accepted you've got to move on ... there were a lot of tough years. And it is still tough, let's be realistic, but there is movement."

Veda's data also showed that while applications for hire purchase and personal loans continue to fall, credit card applications increased by 13.95 per cent in January.

House hunting
* 25 per cent increase in mortgage applications last month compared to January 2011.
* 39 per cent increase in applications by those in Gen Y.
* 29 per cent jump in applications by those in Gen X.