What Housing Bubble?

aucklandCommentators have come out in force recently saying there is no bubble in the Auckland property market. The ten or more years are required for supply to catch up with demand therefore it’s very unlikely there will be a huge correction of property values any time soon.

Auckland definitely has a challenge ahead with property affordability but it would take a disaster to change the status quo and that may come from economic activity offshore.

Meanwhile the banks are profitable and a huge slice of it is coming off mortgages. Mike Hosking’s recent ‘Mikes Minute’ a short video on NZHerald also suggested a lot of commentary is hype from people with other agendas. Property affordability today is the same as it was 20 years ago.

While properties cost more to buy today the mortgages cost less i.e. current interest rates are around 5 percent versus near 20 percent twenty years ago.

There really are two opposing sides to what is causing the Auckland property crisis and arguably both have their own agendas so really it’s up to us to decide whether we let either side impact on our own decision making process – to buy or not to buy!

Property investment mentoring business PropertyTutors says “it’s always a good time to buy” and it’s hard to argue that too as purchasing a property is dependent the purchaser’s financial situation and circumstances around the use of the property i.e. a rental or own home and whatever it’s use the numbers (purchase price, costs etc) have to work.

There really is no one-size-fits-all solution to the Auckland property market.

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