Rate cut should see an increase in listings

PROPERTY prices are likely to be further fuelled by the Reserve Bank of New Zealand’s decision today to cut interest rates despite concerns over the Auckland market, according to real estate network LJ Hooker.

  • 1 June, 2015
  • Interest rate

General Manager for LJ Hooker and Harveys, Keith Neiderer, was not surprised by the move, which will be welcomed by homeowners, but says the Government is caught between “a rock and hard place’’.

“It won’t put relief on price pressure because whatever they do there is still going to be a lack of housing. But at the same time they need to stimulate the economy because of almost zero inflation and a very high dollar,’’ he said.

“There is a strengthening labour market and improving wage levels and it has removed that fear of job losses, so people are feeling fairly positive at the moment and that is good for the property market.’’

Mr Neiderer is sceptical that a crackdown on investors will slow down booming Auckland property prices.  It will take another 12 months for new housing stock currently under construction to be released onto the market and there is already a pent up demand from first homebuyers.

He has seen no rush of investors keen to sell their property before new regulations start on October 1.

Mr Neiderer believes today’s rate cut could motivate empty-nesters to take advantage of rising prices and list their property for sale.

“Annual migration has broken records for nine consecutive months and the only way house prices would stop rising in Auckland is if there is a significant increase in properties for sale or a decrease in the demand and that will not happen,’’ Mr Neiderer said.

“One of the good things about the demand is that it is giving an opportunity to people to think about their lives and there are a lot of people moving out of Auckland.

“They can sell for a million dollars and go to places such as Tauranga, Hamilton or Cambridge which are more affordable and see what they can buy with their money, so I think we can expect to see some gains in the provinces.’’

The winter market could provide the best opportunity to sell, with fewer listing and less competition before the traditionally busier spring market.

LJ Hooker agents across New Zealand have reported quick sales, even in the South Island, where winter sales are more impacted by the cooler weather.

“If you drive through some of the outlying towns and even in Dunedin, everything that is coming onto the market is selling,’’ Mr Neiderer said.

LJ Hooker NZ

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