Real estate agents are advising prospective house buyers to "get amongst it", as a shortage of listings in several parts of the country starts to bite.
August data from the Real Estate Institute shows house prices nationally lost a little steam last month, down 3 per cent to $492,000 compared to the previous month, although they were 5.8 per cent higher than a year ago.
Prices in Auckland continued to scale new heights, hitting $842,500,14 per cent higher than a year ago.
The price is considerably lower than the $1 million-plus valuation which QV put on Auckland houses earlier this month, a difference which REINZ says is due to QV using an average, rather than a median sales figure
Other regions experiencing major price hikes included a mighty 41 per cent annual increase in Central Otago Lakes ($650,000) followed by 23 per cent in the Waikato/Bay of Plenty, and 15 per cent in the Manawatu-Wanganui.
Prices in Nelson-Marlborough hit a record high at $430,000, up 12 per cent on last August.
Economists said it was difficult to tell whether the market's strength was in due in part to investors trying to get in ahead of tougher lending restrictions next month.
However, competition was still very high due to a sheer lack of houses for sale in parts of the country.
Nationally "inventory" shrank 18 per cent in the last year and there was less than 12 weeks' supply of houses on the market in five regions which together represent the bulk of the country's house sales.
Wellington was the tightest market with just seven weeks of supply and Otago had just 10 weeks, while Auckland, Waikato/Bay of Plenty and Hawkes Bay were each down to 11 weeks.
REINZ spokesman Bryan Thomson said spring traditionally brought more listings and choice to the market, but the market was certainly competitive at present.
He did not think the shortage was being caused by people holding off for hope of further capital gains.
"People who are not selling are normally not selling because they are not able to identify where they're going to buy their next property."
His advice to home buyers was to "do their homework," to make sure they knew what they could afford, and what kind of property they were looking for, so they could act decisively.
"Waiting's not a good option."
Harcourts chief executive Chris Kennedy said he also expected spring to bring relief, but admitted listings were getting critically low.
"If you find something you like, conduct your due diligence, conduct it carefully, but act, is what I would suggest.
"I think if we were to not list another house from this point going forward, we would be 2.8 months and we would have no stock. So I'm suggesting that you need to get amongst it."
Given the lack of choice, some economists were surprised to see August sales climb 3 per cent on the previous month, although they were down 3 per cent annually and a full 20 per cent lower in Auckland.
ASB economist Kim Mundy saw no signs of demand slowing down ahead of the new rules, and the tight market was "likely to continue to keep a floor" under house prices.
However, "over the next few months we continue to expect to see activity soften, as investors around the country are required to have a 40 per cent deposit."
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