• 'If interest rates keep coming down, we could easily' break $1m
• Sydney house prices climbing higher than London's
• REINZ warns price will rise on back of cash rate cut

Auckland house prices could hit $1 million within 18 months if interest rates continue falling, experts predict.

Geoff Barnett, national manager of real estate agency chain Century 21, said sales price growth patterns gave a strong indication that the magic million could be hit soon.

"If you look at the growth in the last 18 months of over $200,000, and if we had the same amount of growth over the next 18 months, we could get to $1 million in Auckland. If interest rates keep coming down, we could easily get there," Barnett said.

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READ MORE: Cash rate cut - what it means for you

Today, the Sydney Morning Herald reported on its front page that median house prices in Australia's largest city had broken the "magic" million-dollar mark, hitting A$1,000,616.

"Sydney's median house price has climbed higher than average home prices in London and is fast approaching New York's," it said. "The double-whammy of the lowest interest rates since the 1960s and investor frenzy has seen Sydney's median house price smash through the magic $1 million mark for the first time."

December's house price median of A$881,000 had climbed to A$923,000 by March.

Today, Real Estate Institute of New Zealand warned that property prices would rise on the back of the Reserve Bank cutting the Official Cash Rate to 3 per cent and the banks following suit and reducing mortgage rates.

Hugh Paveltich, the co-author of the annual Demographia international housing affordability survey, predicted the million mark would be hit by March 2017.

"It is sitting at about the $750,000 mark now and [rising] at about $3000 a week, or $150,000 a year, so it should be at about $900,000 12 months down the track. So you are looking at about a year and a half from now."

"The whole thing is a complete circus and I curse the politicians for failing to articulate these serious issues with clarity."

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In Auckland, Barfoot - said to have a market share of about 45 per cent -has reported a steadily increasing number of $1m+ sales.

Barfoot's June average residential sale price was $826,474 and its median was $786,000. That agency reported that 45.8 per cent of the sales by value were for more than $1 million.

Back in January 2009, only 7.6 per cent of the number of sales by value were for $1m+ but by January 2014, that had more than doubled to 21.9 per cent, in line with the rising market, Barfoot figures showed. But by last month, that had hit 45.8 per cent of sales by value.

Barfoot May sales hit an all-time $1 million+ high, accounting for 46.2 per cent of the number of sales by value.

"Nearly a third of all the homes sold reached prices above $1 million," a Barfoot commentary released with the data last month showed. All up, 370 Auckland residential sales were for $1 million-plus. Lower-priced Auckland residential properties remain in hot demand.

We expect the housing market to gradually cool over the months ahead. Auckland has been singled out for tighter mortgage lending restrictions, and the tax rule changes may have more of an impact in Auckland than elsewhere.

"Only 159 homes or 13.6 percent of all homes sold went for under $500,000," Barfoot said.

However Westpac's latest Home Truths commentary pointed to Auckland house prices being hit by a combination of factors.

"We expect the housing market to gradually cool over the months ahead. Auckland has been singled out for tighter mortgage lending restrictions, and the tax rule changes may have more of an impact in Auckland than elsewhere. One key driver of Auckland house prices have been expectations that the city's population will intensify, which has driven up the price of land in central districts of the city. As the economy cools, ebullient beliefs about what land in Auckland is really going to be worth in the future may be challenged," the commentary out yesterday said.

James Kellow, a director of lender NZ Mortgages & Securities, said the $1 million Auckland median would not be reached till after 2020.

"Personally I think house prices growth will slow with increased supply and slightly deteriorated New Zealand economic outlook. With inflation, it is of course inevitable average house prices will exceed $1million, however not this decade in my opinion," he said.

He doubted today's interest rates would immediately fire up Auckland further.

A lower OCR and subsequently lower interest rates would not necessarily mean more people would now rush off and buy a house or borrow more money, he said in a written statement out this morning.

"The Reserve Bank has tightened up borrowing rules with the retail banks to ensure more prudent lending to people, and of course from 1 October new LVR and tax changes will target investors.

I think short-term mortgage rates are probably only going to get lower with another cut to the OCR on 10 September increasing likely," Kellow said.