The last couple of weeks have been interesting for the opposing points of view being reported about what is happening in the market and what will happen in the next few months.
Realestate.co.nz says that tracking sales of properties against new listings of properties over the past 5 years has revealed a new cycle. They say that the supply of new listings follows demand by about 6 months and that their tracking indicates that the supply of new listings will increase by about 15% over 2011 numbers while sales will continue with slow growth. They suggest that this will cause prices to decrease.
Bank of New Zealand chief economist Tony Alexander is wary of anyone claiming to have found a cycle in the real estate market and doesn’t think that current conditions indicate that new listings will increase or prices decrease.
It is certainly difficult for the general populace to be able to feel confident that they can see any trends and this means they are holding back at the moment unless they have an urgent need to find a home. As always, it will be clear in a few months as to who has read the market correctly.
The changing face of Auckland
Research reported recently shows that Auckland’s lifestyle, schools and environment are factors attracting an increasing number of foreigners to move here. In fact Auckland is becoming so popular for migrants that by 2021 non Europeans will make up nearly half of the population. In 10 years it is expected that of every 100 Aucklanders, 27 will be Asian, 17 Pacific Islanders, 12 Maori and 53 will be Europeans.
Associate Professor Elsie Ho from Auckland University says “Immigration policies favour the young, affluent and qualified and starting a family or raising a family is why many of them initially choose to come to New Zealand.” So the positive factors they see in Auckland mean we are likely to see our multicultural mix continue to grow in the foreseeable future.
Auckland is a two speed market
Barfoot and Thompson, Auckland’s largest real estate company, reported figures for January 2012 show Auckland central house prices rose 9% when compared to January 2011 and sales activity was up around 21%. These rises are not being seen in other areas of Auckland which indicate that this huge market is operating at 2 different speeds with stronger activity and prices the closer you get to the central city.
This is probably an indication of just how the difficult commute to work in Auckland is influencing lifestyle and thus housing decisions. Aucklanders are trying to find their own solution to this problem because waiting for local and central government to find a solution is just taking too long.