Housetalk 153

Dear Resident,

The May budget contained nothing that is likely to significantly effect the property market this year. The major factors influencing prices are; Supply- which will take years to overcome and remove the Auckland housing shortage; Demand which is growing with rising net immigration. Mortgage interest rates rises and the LVR (loan to value ratio) will only reduce how fast prices will rise, rather than stopping house prices rising. I attended a real estate seminar this week and two of the speakers were Tony Alexander chief economist for BNZ and another was an economist from the reserve bank of NZ.

Tony Alexander again gave his opinion that Auckland  house prices will continue to rise and suggested 7 - 10% increase over the next 12 months. The reserve bank economist indicated the LVR restrictions are unlikely to be removed this year despite all the press suggesting they will be. Clearly to remove or relax the LVR would in their mind mean house prices would rise too quickly.

West Auckland house prices will probably therefore rise in the next 12 months by between 7—10%. Some suburbs in West Auckland will possible rise faster than Auckland overall. For example the chart below shows how prices have risen in Te Atatu Peninsula compared to Auckland overall.

If you are thinking of selling read my blog on how I get a much better price for my sellers than the average agent. Go to http://johngoodrum.co.nz/. Email or phone for a confidential no obligation market appraisal.

Best wishes,

John