A study by forecaster Infometrics predicts an annual residential price growth of +9.8% next year in Auckland, New Zealand, followed by annual increases of +9.2% until 2012 in Auckland due to a severe shortage of supply.

Researchers pointed out that the country’s largest city is facing a rising population and a limited supply of new housing. The report said: ‘ Auckland house price growth is forecast to be the fastest in the country at +9.2% per annum.’

The report is also bullish about property prices in general as it said that nationally residential prices could rise by up to +24% over the next three years as cheap mortgages and lack of new housing continues.

Figures from Statistics NZ back up the claim that fewer new properties are being built. New housing consents plummeted from 30,000 a year to just 13,000 last year. In addition, estate agents are reporting an increase in activity and that the time it takes to sell a property has reduced from 58 days in July 2008 to 41 days in June 2009.