Property: Got a million? Auckland's for you

This two-bedroom Grey Lynn house fetched $1.5 million.

Value of average city property deal has risen $17,000 in three months to $776,729, real estate firm’s figures show .

One in four houses sold by Auckland's biggest real estate agency last month fetched more than $1 million.

According to Barfoot & Thompson, which released the record-breaking sales figures yesterday, 420 of the 1597 houses sold cost buyers seven figures.

At the same time, sales prices increased almost 4 per cent since February, taking the average price of a residence in Auckland to an all-time high of $776,729.

The cost is 9 per cent higher than the median for March last year and $17,000 higher than the previous record average price set in December.

It indicates the city's housing market is showing no signs of letting up, as first-home buyers scramble to get on the property ladder.

Barfoot & Thompson managing director Peter Thompson said March was always the most active month for property sales, but last month set a string of new highs.

In one fortnight alone, the company sold more than 400 properties each week, the highest two weeks' trading in its 92-year history.

Only March 2003 had bigger sales, when 476 residences sold in seven days.

Last week, agents sold a two-bedroom house in Sussex St in Grey Lynn for $1.5 million - 39 per cent above its council valuation.

"Buyers remain convinced that with a stable economy, low interest rates and restricted housing availability, buying at current prices is manageable," said Mr Thompson.

First-time buyers would be hardest hit, he said.

Until we start getting more property built and competing with existing properties, there will always be that demand on property.

Peter Thompson, Barfoot & Thompson managing director

"It makes it difficult. But we did sell over 300 properties under $500,000 and we still have 290 properties - these are two- to four-bedroom houses - up to about $500,000."

He said that while consents were increasing for new-house builds, many of them would take six to nine months before owners could move in.

"Until we start getting more property built and competing with existing properties, there will always be that demand on property," Mr Thompson said.

"So I think for the next 12 months we'll see similar activity to what we're going through at the moment, but in seasonal trends."

Real Estate Institute chief executive Colleen Milne said the new figures did not surprise her because 87 per cent of homes sold for more than $1 million were in Auckland.

She said there were still options for first-home buyers but they included moving further out to suburbs such as Henderson and Manukau.

ASB chief economist Nick Tuffley said price pressure in Auckland had been picking up since late last year. Factors included strong demand caused by population growth, lower interest rates, fewer listings and a slow uptake of building activity.

Mr Tuffley said the cost of residences around the country was predicted to rise 5 per cent this year, compared with 10 per cent in Auckland.

Meanwhile, Property Institute chief executive Ashley Church advised homeowners to update valuations, which could increase sale prices. He said council valuations, the accuracy of which had been criticised recently, were only a "snapshot" of the value of a property.

"They're not intended to provide an ongoing price guide - particularly in a fast-rising market. If you live in an area where house prices are rising, a recent valuation could be worth tens of thousands of dollars to you."

Record sales
• Barfoot & Thompson's March figures for Auckland

• 420 of 1597 homes sold for more than $1 million.

• 300 homes sold for under $500,000.

• Average house price rose to $776,729.
Source: Barfoot & Thompson