Average Auckland property price soars to $1.2 million - Barfoot & Thompson

Barfoot & Thompson has declared that "confidence has returned" to the Auckland property market, with the city's average sales price now $1.2 million.  

In March, the real estate agency had its most active trading month in two years, with Auckland property sales prices up 10 percent compared to the same time last year.  

"It's definitely improved since last year, there's no doubt about that," Barfoot & Thompson auctioneer David Johnstone told Newshub at the real estate agency's Pukekohe auction room.

Six properties were up for auction, and one of them - a four-bedroom house in the south Auckland suburb - was picked up for under $1 million, by John McFarlane and his wife. 

"To live in a suburb that I would want to live in, was just beyond my budget, and I thought Pukekohe was still doable," McFarlane told Newshub.  

But while Auckland property values are rising, it's coming off a low base. Property values dropped after the Reserve Bank started increasing interest rates to bring down inflation.  

And given those high borrowing costs, at a national level, property values increased by only 0.5 percent in the past month, according to CoreLogic.  

"It's main centre strength, versus a slightly patchier recovery in the provincial markets," CoreLogic Property Economist Kelvin Davidson told Newshub.  

Johnstone suggested that strong migration to Auckland has contributed to demand for properties in the city.  

"People are coming into the country and looking to buy and invest in the Auckland market, especially." 

At a time when the Reserve Bank is battling to reduce demand, annual net migration to New Zealand is at a record high: 133,800 people in the past year

Those people all need somewhere to live, and yet, new figures from Stats NZ show the number of new homes consented to be built in February was down 6 percent compared to the same time last year. 

And the pressure is only going to increase, with ASB analysis suggesting New Zealand needs to invest a trillion dollars in the next three decades to meet infrastructure demands.  

McFarlane felt it was now or never to purchase a property in Auckland.  

"I thought, this could potentially be for us the last year or 18 months before migration, people pouring into New Zealand." 

And so, despite the tough economic conditions, he and his wife are taking a leap of faith, or "seizing the moment" as he described it, before Auckland house prices rise beyond their reach.