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Real Estate Investar Blog

High property prices push Waikato sellers to auction

globe-with-chart-down_smallPrime Minister John Key is warning investors chasing gains in the Auckland housing market they could face a "nasty surprise" as he appeared to tip a cooling of booming price increases.

Property agents came back from the summer holiday period to a sweltering market, which continued on from last year's heat.

All the necessary indicators remain for rising prices, said Lodge Real Estate managing director Jeremy O'Rourke - demand is outstripping supply on the back of continued migration into Waikato.

"We've been surprised by what some buyers have been willing to pay in some sectors. It has set a new benchmark for where prices are."

Last November, O'Rourke said a 54 per cent increase in sales volume in Waikato and Bay of Plenty indicated an artificially low market that was getting back on track.

He said the gap between the national sale price average and the Waikato average was closing quickly.

In December, Hamilton median sale price was $350,000, compared with the national average of $475,000.

Latest figures show Hamilton's median price has hit $449,000, compared with $465,000 nationally.

"There is still some way for it to go, but while we think it will close quite rapidly, there is a distance for it to travel."

Stock is in short supply around the country. Inventory hit an all-time low of 14.7 weeks' supply.

In Hamilton, that was down to five weeks' supply based on November sales volumes, and Lugtons managing director Simon Lugton said it would take six months to correct.

"That is probably the lowest that I can remember in 15 years in real estate," Lugton said.

January is traditionally a slow month for listings, coming off the summer break, but sales volumes over the holiday period remained high as investors picked through the numbers.

Buyers looking for a new home were coming back into the game.

"You just end up with a feeding frenzy on what's left," Lugton said.

The national average asking price in January was $542,514, up 3.7 per cent from December and ending a four-month slide.

Average asking prices fell in Auckland by 2.3 per cent to $828,629 and listings fell 18.4 per cent in the same period.

Bay of Plenty's average asking price topped $500,000 for the first time and Wellington, Canterbury, Taranaki, Coromandel, Central Otago and Southland all hit record highs.

Coromandel's new high is $574,000 - up 3.6 per cent on the high set in November - and is one of the few regions to experience a small - 1.1 per cent - increase in listings.

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