Auckland house prices above 2007 peak, investors back

"Investors are starting to come back to the market, but they have very definite demands," said QV Valuations Glenda Whitehead.

"Some are looking to buy, upgrade and on-sell at a healthy profit - the traders - often taking advantage of continued levels of mortgagee sales. Others require a definite positive cash flow return. The latter is often achieved by creating additional revenue from properties such as converting existing garages to sleep-outs or a further self-contained unit."

Increased activity from investors and first time buyers has helped push values across the Auckland area up 3.4% on last year to their highest ever level, 0.6% above the market peak of late 2007.

Within the Auckland area the greatest increase in value has been seen in the old Auckland City, up 4.7% annually and 2.5% above the previous market peak.