Auckland Property Highs Set To Cool

December 18, 2013

Tips & Ideas

The Auckland Property Market has reached dizzy heights over the last few months of 2013 – will it continue into 2014?

The Government say there are a couple of key indicators that suggest Auckland property prices are peaking.  Mr Bill English says nationally property values are currently rising at just under 10 percent currently but by this time next year they will be back to 5 percent.

What will cool the Auckland Property Market?

The building of new homes increases supply.  The increase in supply of homes should dampen the demand and with less competition for properties for sale the eventual sale price should end up at around a 5 percent increase this time next year.

Another factor that will cool property values is rising mortgage interest rates.  This year has seen zero real change in interest rates however 2014 is expected to see rate rises.

Expectations that mortgage rates would go up next year had “got hold in the market over the last couple of months”, he said.

There was also growing recognition that the Government had made a “thorough, detailed and long-term” attempt to fast track the supply of new homes with policies such as the special housing areas in Auckland and other cities.

Source

There is confidence in the New Zealand economy however this is not expected to translate into wage increases.  A 1 percent increase per year for the next couple of years is more likely the best wage earners can expect.  Inflation is expected to exceed that by 1 – 2 percent.

PropertyTutors mentor Steve Goodey says the deals are out there for property investors.  Our clients are doing great deals – and over the next few weeks we’ll be presenting  property deals done in 2013 so you can see it worked and what actions provided the best outcome.

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