It is early to tell but the median housing stats month on month seems to indicate an arrest in the downward spiral. The REINZ median stats out this month comparing the full October to September makes for an interesting read.
Compared to last October, which in retrospect seems somewhere near the peak, this year the main regions took a bigger hit than the smaller ones. However in Auckland, October compared to September seems to indicate certain regions have moved into positive territory. Auckland City or central seems to be up 7.5% with Papakura at 2.9%, Waitakere at .2% and North Shore at 26.2%.
My thoughts for whats next?
Investor type areas are feeling new tax deductibility rules, this will continue to be less than ideal for well leveraged property investors. Or those with not so strong cashflow. This is leading to more of those properties coming on stream, however on the flip side at the lower levels we note inflation pushes the other way. So for smaller regions where the increasing cost of a hammer and nail makes existing buildings seem attractive, it is hard to justify not buying below cost. I wonder if this is the reason why some of the very investor type areas in smaller towns have not seen the big drops.
Owner occupied type property areas have seen some big drops but I wonder if certain areas will see a slight reverse. My logic is around the fact that at certain income levels, pay increases have been over and above inflation on the basics. The median stats seem to suggest this but again a little early to tell.
As always its fun to extrapolate current data into the future, feel free to be in touch for your next purchase option.
