After the last property market crash in 2008 we saw a very subdued recovery in most parts of the country with the exception of Auckland and Christchurch. Approximately a year ago we started to see areas outside of Auckland starting to pick up.
The government and the Reserve Bank have helped to lift house price inflation in the provinces by introducing rules which favour purchases outside of the Auckland region. Bonus migration points and lower deposits skewed towards regions outside of Auckland are two such tools which are starting to show some real traction.
How sustainable are these price increases and is Auckland really “over” for investors?
We thought it would be a good time to scour through the population figures to see if there is any further insight available.
Looking at the first graph it is easy to spot why the Auckland market may be a hard beast to tame. Its popularity as a place of residence is not waning. Around one in four New Zealanders call it home. Going further afield the other big centres all seem to expanding much more slowly. We wonder how things will look after a full year with the new migrant bonus points system, which gives immigrants an easier path to becoming a New Zealander if they choose to live outside of the Auckland region.
After the last property market crash in 2008 we saw a very subdued recovery in most parts of the country with the exception of Auckland and Christchurch. Approx a year ago we started to see areas outside of Auckland starting to pick up.
Hamilton and Tauranga seem to be punching well above their weight with population seemingly out of kilter with price movements. We wonder if this is due to familiarity or if people are buying with a view to migrate later. Wellington seems like more of a bargain with fairly stable trend of increasing population and very subdued price movements.
Looking at the smaller regions in New Zealand: New Plymouth, Cambridge and Pukekohe stand out. We wonder if Pukekohe being in the Auckland region will push inhabitants further afield. Tuakua which neighbours Pukekohe is on the edge of the Auckland region. It is as close as you can get to Auckland’s Southern region without falling under the restrictions imposed by the central bank and the government.
2016 should be an interesting year for New Zealand, we expect to see a lot more talk about property outside of Auckland in the media. Auckland is still the engine room of the service sector for New Zealand and pressure from the sudden expansion of population will be felt for years to come.
This article has been written by Hamish Patel, mortgage broker with mortgagesonline.co.nz. Ph: 09 625 4693, Mobile: 021 625 693, hamish@monline.co.nz
