After years of record growth, questions are now being asked about Auckland's market. Is now a good time to buy now? Should you consider selling? Can you finally afford to buy? Will there be less competition at auctions? What's the outlook? Here are five reasons the market has changed.
Figures from Auckland's biggest agency have been on a downward spiral lately. Barfoot & Thompson's median price in August was $755,000 - $2000 lower than it was in July, and $9000 or 1.2 percent lower than the median price for the previous three months. The agency's boss Peter Thompson has said the market has been slowing. However, monthly figures are prone to fluctuations, influenced by many low-priced or high-priced sales in such a short time frame.
2. REINZ and many others have noticed how Auckland buyers are fleeing the city because it is regarded as too expensive: "The presence of Auckland buyers in other regions is also becoming more noticeable with a surge in Auckland investors buying in Dunedin and continued strong demand for properties in the Waikato and Bay of Plenty from Auckland buyers," REINZ said in its latest release on September 3.
3. Auctions: people have noticed volumes and attendance rates down. Mortgage brokers Bruce Patten of Loan Market and iLender chief executive Jeff Royle observed that and even Barfoot director Kiri Barfoot said clearance rates on the day have fallen somewhat lately.
4. A 'perfect storm' of Government moves is seen as taking a big toll: from November 1, Auckland property investors borrowing from banks must have 30 per cent deposits and that is seen by the sector as having a huge influence.
5. From next Thursday, new tax and banking regulations are due to come into force. These are being seen as having a huge influence on foreign buyers, with some commentators saying overseas investors have been scared off by demands for New Zealand bank accounts and IRD numbers.
Five signs Auckland's market is not changing:
QV says Auckland houses values are up 53.7% since 2007. Any slight flattening in prices or falls from one month to the next needs to be kept in perspective.
2. This month's REINZ data showed that year-to-year, there was a 20.5 per cent rise in Auckland's median price, from $614,050 last to August $740,000 last month. The same REINZ data showed the highest volume of sales for Auckland during August since 2003. Volume is the measure economists put a lot of stock by so this is worth noting.
3. Pent-up demand: so many people have been locked out of the market for so many years that their influence could keep the market strong, particularly the first-home buyer segment.
4. Migration has been a big drivers of the Auckland property market. New Zealand's annual net migration rose to a record in August, according to Statistics NZ. New Zealand had a net gain of 60,300 migrants in the August year, the 13th straight month a record has been set. Mortgage interest rates are at record lows - another driver of the strong Auckland property market. Rates are expected to sink even lower.
5. Rental property remains in strong demand. Auckland renters can expect to pay a minimum $400 a week, regardless of property type or size, according to Trade Me Property's monthly report out this week.