Harcourts chief predicts house prices could rise further, says more needs to be done to create affordable housing

The chief executive of this country's largest real estate agency says house prices in Auckland face more upward pressure and that more needs to be done to create affordable housing in the region.

Harcourts chief executive Hayden Duncan said the company's provisional sales figures for Auckland and Northland show an average selling price during February of $767,254 up from $683,055 in January.

That average price is likely to come under further upward pressure because the number of homes the agency sold in the region during February was up 3.5% compared to a year earlier, while the number of new listings it signed up was down 7.4%, suggesting demand was continuing to outstrip supply.

"We will see further tightening in supply that will continue to put upward pressure on house prices," Harcourts' market report for February said.

"With new dwelling consents lagging significantly behind population growth, we do not expect to see the price pressure in the Auckland residential property market abating this year," the report said.

Duncan said more needed to be done to accelerate the construction of affordable housing in Auckland.

"It's clear that the Auckland property market needs significant capital investment to spur on residential development and that Council and Government must address the speed of the consenting process," he said.

"It is widely agreed now that prices will remain at current levels for a number of years and there simply needs to be a more effective strategy in place to deal with the housing affordability issue."

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