2 Mar 2015

Pressure on property bubble

9:14 am on 2 March 2015

An analyst says it will need a major outside event to reduce the property bubble pushing Auckland house prices ever higher.

Auckland housing. View from Mount Eden summit

Photo: RNZ / Diego Opatowski

The latest monthly data from realestate.co.nz shows the average asking price in Auckland continued to break records for the second consecutive month.

The average in New Zealand's biggest city reached a new high of $764,424 - a 1.9 percent increase on the $750,023 benchmark set in January.

A year ago, the average asking price in Auckland was at a high of $677,370, which indicated that asking prices across the city have grown by an average of 13 percent, or $87,000, over the last year.

Property analyst Olly Newland said while there was no limit for how high prices could go, in practice he did not think they could much higher.

But he said the pressure on the market was getting greater.

"It will need a huge event, and outside event either local or maybe international to prick the bubble and at the moment there's nothing in sight, so I think the pressure will stay on prices for sometime."

He said he would be staggered if the rate of price rises carried on for several more years.

The report also showed that the average asking price throughout the country during February was $511,000, up from $489,000 in January.

Director of the website's board Bryan Thomson said the Canterbury and Auckland markets were still mostly fuelling the growth in prices.

"It's very heavily influenced by the impact of the Auckland market. So I think we are seeing a strong market in Auckland, Christchurch has been strong for some time - I don't think that's a surprise to anyone," he said.

"And the trend continues as it has for quite some time."

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