Market Update

Immigration, lower interest rates and a shortage of property for sale all equal a buoyant busy market.

Keith
  • 1 June, 2015
  • RESIDENTIAL
  • Market

NZ immigration rose to a new annual record in April as more students arrived from India and China and fewer locals left for Australia.

The country had a net gain of 56,800 migrants in the year through April ahead of the 34,400 gain in the year earlier period.  The gain in immigration was driven by India with a net gain of 12,200 people in the year through April followed by 7,800 from China, 4.600 from the UK and 4,000 from the Philippines.  About three quarters of migrants from India and half of migrants from China arrive on student visas.

Immigration has broken records for nine consecutive months, the weaker Australian economy is keeping New Zealanders at home.  The Auckland housing market growth in supply is severely restricted by planning laws.

The only way house prices in Auckland could stop rising, is if there is a significant increase of properties for sale, or a decrease in demand.

Many Aucklanders will take advantage of record prices and sell their existing home then move to more affordable areas eg Hamilton, Whangarei, Tauranga, Matamata, Cambridge.

Some families are being attracted further afield, moving to the South Island and leaving the hustle and bustle behind them.

Aucklands traffic is now a 7 day a week procession, not the 5 days it used to be.  Can we expect the situation to change?

Capital gains will not be at the same level as we have seen in the past 18 months.

Across the City any properties that can be subdivided will be in demand as developers know they will have multiple buyers waiting for these.

Anyone returning from overseas after a few years away hopefully will have an existing home to move into, which has been rented whilst they have been away.  If not these families may find it hard to get back into the Auckland market.

Some investors may also take the opportunity to sell property and build equity in their existing portfolio.

Rental housing will continue to be in high demand, with rents increasing to cover rates, insurance, maintenance.  Tenants will need to grit their teeth and pay the increases as often they are settled into the local environment, schools, sports clubs etc.

The Auckland market will continue to be in favour of vendors.  Auction will stay as the preferred method of sale, simply because demand  is outstripping supply.  Nobody can put a value on a property hence Auction is the way to go.

More and more families are joining together, living in the same home as the cost of living forces them to.

March saw 8,803 sales across the country being the highest volume of sales for over a year.  Moving forward sales volumes I believe will be around 6,000 to 7,000 per month with Auckland as usual dominating the numbers.

Regionally we are seeing the supply of property for sale begin to tighten and the beginning of demand out stripping supply.  Many real estate agencies are finding it increasingly difficult getting enough properties to sell.  Properties that have been on the market for up to a year or more are being sold.  Median days to sell will start decreasing to lower levels.  Many investors are finding regional residential property to be good or great value as many homes can be purchased for less than it costs to build them.

If you are thinking of selling there is no better time to talk to your local LJ Hooker Agent.
Nobody does it better than LJ Hooker.

LJ Hooker NZ

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