Auckland house prices have changed after what has been a stella run for many years. The average prices reported by QV were showing some positive signs for buyers as early as December. My own guess would be that houses have become 5%-10% cheaper in the past 6 months.
The key things which seem to be having an impact on prices:
– More responsible lending by banks
– The expectation of interest rates returning to more normal levels
– A much healthier deposit required for investments (40%)
Whats ahead?
I feel that most of the impact from these factors have already taken place. On the horizon there is another two factors which will have an impact in terms of house prices in Auckland.
- Unitary Plan – this has meant that most of Auckland is sub dividable – check out if you property is sub dividable over here
- Positive nett migration and a solid economy
Credit card spending was strong this Christmas, which may indicate that people feel confident. There will be a limit on how much prices correct by if the economy stays strong and rates hover around the 5% mark. If you are ok with repayments and you still have a job you might not feel like taking a big hit on a house price when selling.
The Unitary plan will be interesting as it increases supply dramatically. However the next bottle neck will be the speed at which houses can be built and also available funding for developers. At the writing of this article many developers are facing somewhat of a freeze on lending from the banks. If non-bank solutions can fill this gap we might see a real building boom.
Either way it is a great time for buyers right now.
