House prices that are as high as they have ever been in some areas should not be seen as a sign that another property boom is looming, the Real Estate Institute of New Zealand says.
In a new research paper, the institute agrees with Reserve Bank Governor Alan Bollard that there is no need to be concerned about house price inflation despite low mortgage rates and higher sales figures.
While house prices might be back to an all-time high in Auckland in particular, chief executive Helen O'Sullivan said they had not kept pace with inflation.
"As the data shows, the number of sales remains well below the longer term trend, prices are only just getting back to where they were five years ago and buyers aren't rushing to purchase properties."
Realestate.co.nz chief executive Alistair Helm agreed: "When you factor in inflation, house prices are still 12% below their peak."
He said even though annual sales figures had picked up to cross the 70,000 threshold, they were coming from a very low level and were still well below the 100,000-plus of 10 years ago.
For the property market to be classified as in a boom phase, more than 6% of the total housing stock needed to be turning over. Sales were near that level for much of the 1990s.
In December, the total number of houses sold in New Zealand was 3.25% of the housing stock. O'Sullivan said 60 per cent more houses would need to be sold for there to be a "boom".
O'Sullivan said pressure in Auckland and Christchurch was due to a loss of housing stock, from the leaky building crisis and earthquakes respectively, and a lack of new building, rather than a true boom.
Last week's ASB quarterly survey found 57% of respondents expected house prices to increase further.