Propertyscouts Hamilton

High property prices push Waikato sellers to auction - 8th Feb 2016

Sellers are taking a punt on a hefty sale price in a property market that has maintained its upward momentum into the New Year.

Figures released on February 4 from realestate.co.nz show prices in Waikato are at a record high of $440,784 - up 6.3 per cent on the high set in December of $414,596.

But Harcourts general manager in Hamilton, Brian King, said the number of houses listed with asking prices is on the wane.

Sellers are opting for auctions, tenders and negotiations - accounting for more than 50 per cent of Harcourts' Hamilton listings.

READ MORE: Waikato property sales streak ahead

"Those figures are hard to put into context, because so much is coming into the market without a price," King said.

Two years ago, everything had an asking price, he said.

Property owners are taking their chances in a booming market and competition is fierce. There is also a shortage of supply, fuelling what one real estate agent called a "feeding frenzy". 

"There are more buyers than sellers, so a lot of the vendors are choosing to go the auction way to get competitive bidding," King said. 

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. 

Elton Rikihana Smallman - Stuff

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