REINZ stats are right up to the minute, as it includes unconditional house sales which are yet to settle. Auckland month on month in September saw an increase of 2.9% in the median price; while a further breakdown reveals 3.7% coming from Auckland City, 7.7% coming from Franklin. Further afield Wellington with a 2.7% increase and Canterbury with 2.3%.
It seems the activity in Auckland is still predominantly in the home buyer market. However anecdotal evidence based on our client base, seems to suggest a little more interest in investments. It does feel like the opportunities may linger longer if there is confusion over a capital gains tax.
We are only really getting request from home buyers and more experienced investors. This presents a window of opportunity as lower interest rates makes holding a rental property more palatable. The more cashflow type areas seem to offer relaxed buying, however we have noticed that anything with a lawn in Auckland will mean some competition already. If you are looking to invest in a townhouse you still have an abundance of choice.
Factors ahead
We have noticed that the RBNZ will be opening the doors to around 25% more low deposit buyers come December. Along with an increase for investors with less than a 30% deposit towards an existing home(new builds still smaller deposit). The central bank feels comfortable to start easing deposit requirements as they now have the Debt to Income ratios in place. Interest rates are easing and there is a strong possibility of another OCR cut at the end of November.
Although overall factors would suggest that there is now some upwards pressure for house prices, there is some balance on the horizon. Debt to income ratios might mean there is some cap for certain types of housing as this may force investors to start focusing on stronger cashflow. Also there is an exemption to the DTI for building or buying new, so we could see further interest in subdividable properties. Rents are dropping in bigger cities due to a large increase in town house supply, this will linger on the calculations for investors going forward.
So overall its a great market to be in where we still have some relaxed buying possible.
