Auckland Market Looking Sound

Posted on Thursday, March 10 2011

Usually the 3 main centres survive the downturns well, however clearly the tragic events of Christchurch result in a market in which no one will really know for some time whether prices have increased, decreased or remained static. Would be challenging being a Valuer down there! Comments from property professionals in Wellington indicate that the rental market is nowhere near as buoyant as Auckland with house prices overall being fairly stagnant like Auckland. One would not be expecting many people from Christchurch moving to Wellington which has long been expecting a major earthquake. Let’s just hope and pray our Volcanoes don’t come to life.
The smaller towns are generally performing poorly which leaves Auckland as looking most favourable for rental and value increases.(although many varying performances are occurring within the sub-markets).
Central areas such as Grey Lynn appear quite hot in terms of rental and sales, medium cost areas further out such as Howick are steady with little stock and reasonable demand whilst the lower cost investor areas have strong rental demand but prices have still going sideways for some time. It appears investors have been requiring a greater yield to compensate for less tax advantages.
However with rentals in such short supply it is inevitable there will be some upward pressure on prices due to the overall shortage in accommodation and many agents have been reporting an increase in enquiry and sales. With the .5% drop in the OCR this morning, rents are fairly similar to mortgage repayments for a lot of first home buyers even if you only have a 5% deposit, and most banks are now considering 95% lending again(albeit with strict criteria). For investors the low interest rates almost compensate (at least temporarily) for the ceasing of building depreciation claim to take effect in a few weeks time.
It is easy to get caught up in historic statistics (especially when you are a Valuer!) however many agents are now quite upbeat despite the slow start to the year in January. Buyers now have confidence that interest rates will remain low for some time and many who were ‘waiting in the wings’ as well as the many who already secured pre approvals are now looking more aggressively. Often they are met with a limited range of good stock and if they find something that suits, it would be unwise not to be decisive and make a reasonable offer.

 

Rene McLean.

 

 

 

 

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Property InDepth Rene McLean

Rene McLean - Auckland Franchiser. Property InDepth is New Zealand\'s only fully franchised property valuation and property consultancy service. The only valuation service that can provide comprehensive reports to you, within hours of completing the inspection. So relax and enjoy the experience, that's what we are about.

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