So interestingly the news just out – median house prices are up from same month last year. REINZ stats for June is an interesting read and in sharp contrast to many predictions by economists.
Just how much has house prices moved in Auckland? It seems quite a bit; Auckland City showing an increase of 17%, Manukau City – showing an 8.3% increase.
To keep things in perspective, the median house price data does not reveal everything. From just talking to agents it does seem that certain areas are seeing more of an interest than others.
Obviously if you own a older home in an established suburb with some land you might see some impressive increases. However in certain pockets even this aspect does not get you more than last year.
Home buyers more active
Home buyers are more active. Investors are in but not in the same way as previously. I think the couple trading up to a bigger home who decide to hold their old home, is more fashionable. As opposed to the investor looking to add to their portfolio in Auckland.
Changes to the tenancy act might hold the investors at bay for a little while. However once the reality of low interest rates set in, the prospect of neutral or positive cash flow should be enticing .
Banks ease up
The biggest factor holding demand on the side line I think is bank criteria. There still exists a large gap between what the banks think you can afford as to what you can actually afford. Some banks are using test calculators with a 6%+ on it.
The banks may start to ease up on this stance and we have seen a little of this beginning.
This means there is more potential demand to pick up from the pressure of home owners facing less income. Most Nzer’s will still keep their jobs and some industries such as infrastructure may see skills shortages push wages up.
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