Recent stats may suggest house prices reaching a floor but can we expect an enthusiastic upswing? Nostalgia from past housing cycles may give a sense of certainty but I think things could be a bit different this time round.
Auckland seems flat when comparing month on month median house prices. Lending growth is heading towards numbers seen in more recent years but likely will face the standard winter chill. However with first home buyers out in full force even before the recent easing from RBNZ, we expect things might feel some pressure especially in the $800k – $1.2M range. NZer’s trading up might follow later as many need to sell to a first home buyer at the right price.
The next upturn?
NZ might see a very different boom next time round as some key factors get trialed out. One being debt to income ratios which will come in force next year. This will cap how much one can borrow to a multiplier of ones income. Some things will be outside this DTI ratio, such as building, commercial and buying new.
So I would expect a slower paced boom and new builds or construction becoming more popular. Either way a more stable housing market should mean more comfortable path forward.
My generic advice? Crystal ball stuff, subject to all sorts of things, development sites will become more popular once the exemptions to DTIs get digested. Till then I expect only the first home buyer type homes to feel any real pressure. And even then new builds might ease the angst with more supply.