23 Apr 2011

Auckland house price rises predicted to be modest

1:52 pm on 23 April 2011

Key players in the Auckland housing market have greeted cautiously forecasts by banks of price rises of 5% for this year.

Goldman Sachs believes prices could be up 5% on an annual basis by the end of this year, while ASB is picking 4% - 5% growth overall, with the central city increasing by even more.

Both are predicting house prices rises will outstrip the rest of the country.

However Barfoot & Thompson managing director Peter Thompson is more cautious.

Although the real estate firm had its best month in four years last month, Mr Thompson is predicting a rise of 2% - 3%, less than the rate of inflation.

Auckland University property lecturer James Young says the rising cost of living and job uncertainty will cap gains this year.

He says last month's surge in sales could even be a sign of distress, as indebted owners trade down to smaller properties.