A shortage of residential property in New Zealand's largest city could result in a real estate boom with prices rising 30% in the next three years, it is claimed.
A study by forecaster Infometrics predicts an annual price growth of 9.8% next year followed by annual increases of 9.2% until 2012 in Auckland because of a severe shortage of supply.
Researchers point out that the country's largest city is facing a rising population and a limited supply of new housing. 'Auckland house price growth is forecast to be the fastest in the country at 9.2% per annum,' it said in its report.
Although currently the city is experiencing a yo-yo effect in terms of prices. For example, prices in Manukau are up almost 5% those on Rodney's are down 13% on a year ago.
But the researchers are convinced it will pick up. 'The persistently low level of residential construction activity in Auckland over the past few years has led to a shortage of property in the region,' the report adds.
'These under supply issues are set to provide good support for property prices over the next 12 months and by 2011/12 housing supply issues are likely to be dominating price trends in the region,' it continues.
The report is also bullish about property prices in general and says that nationally they could rise by up to 24% over the next three years as cheap mortgages and lack of new housing continues.
Figures from Statistics NZ back up the claim that fewer new properties are being built. New housing consents plummeted from 30,000 a year to just 13,000 last year.
And estate agents are reporting an increase in activity and that the time it takes to sell a property has reduced from 58 days in July 2008 to 41 days in June 2009.
'The market is some areas is very hot at the moment,' said Steven Glucina of LJ Hooker estate agency which is selling properties in the popular Ponsonby area well over valuation price.[Property Wire News]