6 Nov 2016

House prices on track to reach $3m average

5:24 pm on 6 November 2016

Average house prices could reach $3 million in 20 years if the same annual growth continues.

Sold sign outside a house in East Auckland

Photo: RNZ / Claire Eastham-Farrelly

Property analysts Core Logic used the basic average increase of 6 percent a year between the years 1990 to 2014 to calculate the projection.

But its senior research analyst, Nick Goodall, said it was highly unlikely average house prices would be allowed to reach that price.

Mr Goodall said the analysis was crude.

"It tells you how much growth we have had in New Zealand over that 25 year period, and the fact that that won't be able to continue.

"So all the factors that affect the market will need to be looked at to make sure that we don't get to a point where that price is hit, especially that soon."

Mr Goodhall said he hoped the figures would encourage the government and groups, such as councils, banks and investors, to act.