Latest headlines would lead you to believe that the market is down 10% percent. Dig a little deeper and what is apparent is the lower volume of houses changing hands. Around 10% less in February when compared to the previous February. In Auckland this kind of volume was last seen in 2010, which was at the beginning of increasing house prices.
Looking deeper in the breakdown in term of changes to the median price; Auckland fairly flat down slightly, Wellington seeing a decent pick up along with Tauranga. Hamilton fairly flat with a slight increase. The smaller towns still showing promise and activity. Whangarei, Rotorua and Palmerston North all decent towns to watch with double digit increases in the annual median price.
Capital Gains Tax to impact?
Initially it seems there are many questions around the impact. And the questions alone can lead to a stall in price movement. However looking at other large cities outside of New Zealand a capital gains tax has seem to have hardly an impact. With some cities showing a massive growth with capital gains tax. Australia coming off a housing market boom which has lasted decades with a tax in place.
My own thoughts are that after the dust has settled, people will realise that housing market booms are more about leverage. Basically during times of easier credit markets see major increases. Being able to obtain secure long term loans to purchase a house which also has a steady source of cash flow is what makes housing so great.
If you make a $100 but have to pay $20 or $30 of it to someone else, would you say no to the $100? You still get to keep most of it.
