Most of our main data measures are effectively tracking sideways at the moment. So with ‘nothing to see here’, it’s given me time to delve into the hot topics currently circulating the property market.
Over the past five years, the value of two bedroom houses has grown by more than those in the 4-6 bedroom category across the majority of the country. Given the smaller deposits required in these times of low affordability and restricted credit flows, this pattern of value growth seems logical.
Ever had that delightful emotional rollercoaster of an experience when you see a property you love, but have to sell your existing home before you can buy it, so you put in an offer ‘subject to sale’ and cross your fingers that the deal doesn’t fall over?
Employment growth remains high with the continued rise in dwelling consents also illustrating that there is strong demand for property. The prospect of low and stable mortgage rates into 2019 will also support property values.
New Zealand is currently in the midst of one of the three biggest booms for building consents that we’ve ever had.
Mortgaged investors have found the market somewhat tough going in the past few years, while first home buyers have retained a better hold. Further wariness by banks to lend interest-only may see these patterns continue for a while yet.
Property market performance across the main centres continues to be subdued based on July’s index, except in Wellington where a strong recovery was evident.
According to the June quarter CoreLogic New Zealand Quarterly Property Economic Market Review released today market conditions slightly weakened.
Rotorua is experiencing a residential building upswing with several Greenfield sites coming through the pipeline. However, the demand outlook seems firm, so the new property will certainly be needed.
My main observation from a few weeks travelling around the country is that people have just accepted that volumes and values have slowed and they are ‘moving on’. Caution is the word that probably best describes expectations for the next 12-18 months, rather than pessimism.
Lower-priced suburbs and/or those that have seen high turnover rates over the past year have tended to have seen the most value growth. Several of these are in the lower North Island. Weaker suburbs have been concentrated in Auckland and Christchurch – no surprises there.