Real estate industry observers are saying Tauranga house prices can be expected to start climbing during the next six months as demand begins to exceed supply.

Tauranga house prices are expected to climb.

Harcourts ceo Hayden Duncan says there's still quite a strong supply of listings in the Bay, but that has tightened up dramatically during the last two or three months.

'And that's a sign there is going to be some upward pressure on prices in the next six months,” says Hayden.

'That's what our indicators tell us, based on history. Demand stays relatively the same, but we see some upward pressure on pricing, particularly through Hamilton and Tauranga.

'It probably fits into a buyer's market in Tauranga at the moment, but that will probably change.”

Harcourts statistics show that throughout the country, there has been an overall cooling of property prices. In Auckland the average house price has been steady since March, predating the Reserve Bank's tightening of loan-to-value ratios in August.

The Reserve Bank's announced intention is to dampen property prices through stricter lending criteria. There has been no noticeable effect on the market since the announcement.

'A lot of people would be surprised to see, particularly in the northern region, that prices have been static for a number of months now, well before the reserve bank limiting lending,” says Hayden.

Two years ago Harcourts expressed strong concerns about an on-going lack of incentives for new buildings, which has transpired, says Hayden.

'That's putting pressure on stock and ultimately on prices. Our data is telling us it's not people that have got limited access to funds that are driving prices. It's everyday New Zealanders that have got a change of circumstances; and so they are needing to upsize, downsize, move sideways, or just get to the other side of the street for school zones.”

Even the Reserve Bank says at the moment only 20 per cent of housing loans fall under the 20 per cent equity situation. The banks are limiting that down to 10 per cent, says Hayden.

'So only 10 per cent of those purchasing at the moment are going to be affected. Our concern is actually that it is the people that are not impacting the pressure in the market that are going to be affected the most – that's first home buyers primarily in provincial markets which are pretty tough anyway.

'Where are the banks going to lend that 10 per cent? It's going to be the candidates that are most secure of income and with good prospects. In most cases that security of income, and facility to repay loans, is going to come more from the cities.

'Provincial New Zealand is still sitting on a knife edge as far as confidence goes, and the New Zealand dollar is not helping that,” says Hayden.

'So it's a really confusing decision they made around the LVR as opposed to a tax on investment, which is probably going to have a greater effect.”

The Auckland housing market is still very much a seller's market, says Hayden, with houses selling in less than 30 days.

'There's still plenty of competition,” says Hayden. 'Prices have remained steady, they are not continuing to rise, not at the rates that they were. ‘Days on market' indicate if you want to sell today you have a very good chance of getting what you wanted or what you are expecting for your property or more.

'I think as you go out of Auckland or out of Christchurch it gets exponentially harder. In the Bay there's still quite a strong supply of listings, albeit that has tightened up dramatically during the last two or three months.”

Harcourts reports stock levels are down everywhere, with Auckland minus 10.2 per cent during the last year and Christchurch at minus 23.8 per cent – the worst affected. The Central Region, which includes the Waikato and Bay of Plenty, is minus 8.6 per cent. Stock levels are also down in Wellington minus 3.2 per cent, and South Island Provincial minus 9.5 per cent.

Auctions nationwide are up by 24 per cent on the same time last year, a direct result of vendors becoming more savvy to the benefits of auctions in a high demand environment, Harcourts' market watch reports.

Properties on hand in the central region are 2,939 compared with 3216 in 2012.

Total new listings is 501 compared with 583, down 14.1 per cent. New auction/tender Listings are 74 compared with 84, down 11.9 per cent.

Written sales are up slightly, 396 compared with 378, a 4.8 per cent rise. Average price is $340,872 compared with $344,207, a drop of one per cent.

The drop in new listings and options compared with the 2012 figures is partly attributed to an unseasonably strong August last winter. Prices are remaining steady, and at an average of $340,872 the central region remains an affordable option for buyers wanting to escape Auckland prices. The 8.6 per cent drop in available stock is seen as a flow-on effect from the high demand market in the north