Dear Resident,
West Auckland prices just keep rising (Auckland in general as well). The Waitakere City October median selling price was up to $578,500 from $535,000 in September and $515,000 in August. The average days to sell on the market was the same at 30 days and sales of 296 dwellings was down by 4 from September which was 300 exactly.
Will it stop? Is it a bubble that will burst and see prices fall? NO– or at least it is highly unlikely. On the contrary I expect prices to keep on rising. Its all about supply and demand.
There is a large and growing demand (more buyers) and a shrinking supply (less houses).
Demand- Net migration inflow which is now running at 45,000 for the last year and projected to reach 55,000 soon. Many first home buyers shut out by the harsh LVR rules will eventually buy. The New Zealand economy is strong and the outlook is very optimistic so more affluence means more buyers.
Banks are becoming more accommodating (aggressive) to lend to homebuyers. Mortgage rates are not likely to rise perhaps even next year. Low return on bank deposits means buying rental property is a better option.
New house construction costs-better insulation, better earthquake resistance, double glazing etc are rising and so existing house prices rise too. There are also other contributing factors.
Supply- Auckland has a housing shortage estimated at 40,000 and it continues to get worse. In 2012 Auckland City Council estimated it needed 13,000 houses to be built each year. In the year to September 2014 7,320 were built, 2 years ago the number was only 5,595. Who will build them? There is an obvious shortage of builders and trades people.
Prices in my opinion will not level off until we achieve close to a balance between supply and demand. That is likely to take several years, probably 5 plus years.
Capital Gains October 2009 - 2014 - Median Prices
Laingholm 35.1% Te Atatu South 74.3%
Swanson 39.7% Glendene 41.5%
Do you want to know the value of your property? Its probably worth more than you think. Contact me for a free no obligation value update.
Best wishes,
John Goodrum
Licensee Agent REAA 2008
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