7 Sep 2012

Economist predicts Auckland house prices will keep rising

7:34 am on 7 September 2012

An economist is picking house prices will continue to rise, particularly in Auckland, as demand outstrips supply.

Realestate.co.nz's latest property report shows listings rose 10% in August last year compared with the previous month, and are up nearly 2.5% on August last year.

The average nationwide asking price rose to $430,500, a 1.7% increase compared with the same period a year ago.

Earlier this week real estate agency Barfoot and Thompson said it expected Auckland's prices to ease as more listings came on the market for the traditional spring selling season.

But ASB economist Jane Turner expects a pick up in house prices nationwide of about 4% a year.

House prices are elevated compared and that limits how much they will rise, she says.

Ms Turner says there is very low supply relative to the level of demand in Auckland and the number of houses available for sale has steadily dropped.

She says there has been a very gradual recovery in household incomes over the last year and confidence in the housing market has also improved.

Ms Turner expects pressure on the housing supply in Auckland and Christchurch to continue while the rest of the country remains more subdued.