The inventory of homes for sale in the Waikato region has seen a dramatic decline, with the number now less than half that at the same time last year, a report shows.
But Hamilton real estate agents say the city's market is likely to bounce back with renewed interest from
first home-buyers and investors.
A report from realestate.co.nz showed inventory levels, or the number of homes available and the time needed to sell them, had seen a decline of 58 per cent.
The report says the Waikato has an inventory of 42.9, which means it would take that time in weeks to sell the entire stock in the region.
Realestate.co.nz chief executive Alistair Helm said the Waikato has gone through a quiet period in terms of listings but sales had begun picking up around May last year.
"There was a little bit of uncertainty around the World Cup but the underlying trend has been upwards over the last eight months. If you took the last three months we are up 22 per cent on last year."
Mr Helm credited buyers becoming used to less-volatile interest rates and the ratio of people who had come off fixed rates to variable rates as drivers of the increase in activity after a stagnant three years.
But despite the surge in the real estate market, he said the overall picture was still lacklustre, particularly when compared with sales of the early 2000s.
"There is not the same volume of transactions we saw in 2005, it's barely half that transaction volume but is up 20 per cent to around 60,000 transactions a year," said Mr Helm.
"People are getting excited saying the market is coming alive but only because it has been lacklustre for the past three years. It's coming alive because the market needs to breathe."
Diane Tyer, manager of LJ Hooker Te Awamutu, said listings had been short and the 120 homes on her books was "quite a few short" of the number at the same time last year.
She said there was an influx of buyers wanting homes in the $600,000-plus category but there were "very, very few" they could offer them.
"I think people have been sitting tight because houses haven't been selling well and people haven't been getting big money for them."
"Now there are some people out there with money to spend but there are just none to buy."
Lodge Real Estate managing director Jeremy O'Rourke said Hamilton city's real estate stock levels had fallen but only marginally and back to levels that were seen mid-2011.
He said this was an expected seasonal trend and things usually bounced back in February.
Sue Hall, of Ray White Hamilton, said there were a number of homes in the city that were overpriced and not moving.
She said there was a "shortage of good stock" but well-presented homes, particularly in the suburbs of Rototuna, Flagstaff, Claudelands, St Andrews and Pukete areas, were popular.
The numbers
$365,788 median house price in Waikato, up 6 per cent on last year
511 new listings in Jan, 1 per cent up on last year
42.9 weeks to sell all houses on Waikato inventory, 58 per cent down on last year
Source: realestate.co.nz