Auckland house prices will rise by almost 30 per cent in the next three years putting the city ahead of every other region in New Zealand, a study predicts.
The Infometrics study forecasts annual price growth of 9.8 per cent next year but 9.2 per cent annually overall between now and 2012.
Auckland’s coming rise would be fueled by the city being the largest in New Zealand, with a rising population and a limited supply of new housing.
Manukau house prices are up almost 5 per cent but Rodney’s are down 13 per cent on a year ago.
Not all areas have picked up yet.
Infometrics’ outlook for Auckland house prices shows prices will be up 9.8 per cent in the year to June 2010.
“Auckland house price growth is forecast to be the fastest in the country at 9.2 per cent per annum,” Infometrics said of the outlook until 2012.
“The persistently low level of residential construction activity in Auckland over the past few years has led to a shortage of property in the region.
“These under-supply issues are set to provide good support for property prices over the next 12 months.
“By 20011/12 housing supply issues are likely to be dominating price trends in the region,” Infometrics said.
“Having experienced a larger decline in sales activity than the national average over 2008, house sales growth in Auckland is now moving in line with the nationwide trend.”
House prices nationally could rise by as much as 24 per cent over the next three years.
Cheap mortgage money and a lack of new housing were combining to push up prices, and the downturn was over, said the study, commissioned by mortgage insurer QBE LMI.
But property author and commentator Kieran Trass said the downturn was far from over.
Prices in some Auckland suburbs were down by about 20 per cent and the slump had some time to run.
But Infometrics s predicted that low interest rates and the housing shortage would push house prices up by almost a quarter by 2012.
Statistics NZ figures show new housing consents plummeted from about 30,000 a year early this decade to 13,000 in the past year.
Infometrics said the median house price had climbed to $339,000 in the June quarter from a low of $330,000 in March.
The number of house sales had already had a strong lift.
Sales were up 41 per cent in the June quarter compared with a year earlier, it said.
“Residential property is also taking a significantly shorter amount of time to sell. Across the country, median time on the market has dropped from 58 days in July 2008 to 41 days in June 2009,” the insurer said.
QBE chief executive Ian Graham said housing affordability had improved throughout the country.
“Demand among buyers has increased,” he said.
“With improved credit conditions and record low interest rates, the motivation for first home buyers and investors to enter the housing market has never been more compelling.”
Steven Glucina, a Ponsonby real estate agent at LJ Hooker, said the market was very active.
“I sold a two-bedroom do-up villa at 61 Pine Street, Balmoral under the hammer on Saturday for $679,000, which was $109,000 over the council valuation.
“The market in this area is red hot at the moment. This is the fourth home that I have sold in the street in the past three months.”
GOING UP SOON
Infometrics’ predictions on Auckland median house prices
* 2009: $440,000
* 2010: $483,200
* 2011: $506,700
* 2012: $553,000
NZ median house prices
* 2009: $339,200
* 2010: $376,200
* 2011: $391,400
* 2012: $419,400