New Zealand has topped a global list for the biggest rise in house prices in the past year, according to a new report.
New Zealand has had the biggest rise in house prices in the world. Photo: 123RF
Estate agents Knight Frank found property markets in New Zealand, Turkey and Canada grew between 10 per cent and nearly 14 per cent.
While New Zealand came in second after Turkey in raw numbers, it topped the list once the impact of inflation was stripped out.
The average house price in Auckland hit $1 million for the first time last month.
Quotable Value's monthly house price index for for August shows the average in Auckland is now $1,013,632 - up from July's figure of $992,000 and 85.5 percent higher than the previous peak of 2007.
The average price of an Auckland home is now $1,013,632, according to QV. Photo: 123rf.com
The national average price for August increased 14.6 percent over the past year to $612,527.
The report said New Zealand's property market was ranked among the Asia Pacific region's star performers, along with Melbourne and Sydney.
Taiwan was at the bottom of Knight Frank's ranking, with price falls of 9.4 percent over the past year.
Hong Kong and Singapore had also seen significant reductions in house prices, according to Knight Frank.
Housing analyst Hugh Pavletich said high housing inflation had many negative effects and getting to the top of the world rankings was "not a prize worth winning".
"What it is doing is denying people the opportunity to house themselves affordably."
Alan Johnson, a housing analyst for the Salvation Army, agreed, saying this was very bad news for ordinary people.
"It is not just about the house prices, it's about how much it costs to rent, and in those areas I think we're even further back, because our incomes haven't risen much. There are people crowding in, living in makeshift accommodation, people stressing because effectively they've got less money to spend on things they need in their life."
Westpac acting chief economist Michael Gordon attributed the house price rises to New Zealand's relatively strong economic growth.
"It's not fantastic on an outright basis, but at a time when a lot of the world is recording fair to middling growth we have had some pretty decent results here."
Mr Gordon said in the near term some cooling of the housing market was likely because of the loan-to-value restrictions annnounced in July by the Reserve Bank.
"But overall low interest rates tend to dominate in our analysis - and I think we will continue to see that over the next year."
- BBC / RNZ
