Onwards and upwards is the progress of West Auckland house prices. The Waitakere City November median price was massively up from $535,000 in October to $602,000 in November. Sales numbers were up as well from 300 in October to 429 in November. The average days to sell was 29 days.
The OCR announcement was that the rate stays unchanged at 3.5% so mortgage rates are unchanged. Inflation is still below 2%. With falling oil prices, a strong NZ dollar and cheaper imports (holding back any import driven likely inflation) there may even be pressure for the OCR to fall next year, thereby reducing mortgage interest rates.
The governor signalled no imminent reduction or removal of the LVR restrictions and even hinted at restrictions on leading to investors. Keep on trying Mr Bollard but market factors determine house prices not the Governor of the reserve bank of a tiny economy in global terms.
Demand greater than supply = Prices increase, PERIOD.
Tinkering with demand is futile and seriously hurts first home buyers. To fix the problem fix the supply. Build more houses. How? What about incentives to build? Make it cheaper to buy new than existing, by perhaps introducing a lower interest loan on new houses.
We still need more tradespeople to build them– so bring in more immigrant builders and tradespeople. This will also retard wage inflation and rising house price building costs. Just a couple of thoughts.
Capital Gains October 2009 - 2014 - Median Prices
Henderson 66.2%
Te Atatu Peninsula 64.9%Glen Eden 54.8%
Massey 49.6%
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
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