Auckland House Prices Is In Bubble
3rd Jan, 2017
Auckland House Prices, Is It A Bubble Due To Burst?
The house prices in Auckland have doubled in the recent past while some of the parts of the country are yet to recover from 2008 crash. It is predicted that the house prices will continue on slower upward trend until December 2017 when they will fall by 11 percent for a period up to 2019. The fall in prices will occur due to an oversupply of houses given the rapid building of new homes as the population growth slows down.
According to Infometrics, the consent to build houses is expected to rise to about 40% on the current standing by 2018. Five years ago there were 13,917 consents, there 28,387 consents now and it is projected that they will reach 40,044 annually by June 2018.
Currently, there are 86 suburbs in Auckland up from 13 in 2012 with areas such as St Mary’s Bay and Herne Bay prices averaging above $2 million. Suburbs to the west and the south have seen faster price increases that the luxurious suburbs in other areas. Private property sales in Auckland areas such as Clendon Park, Mangere East, and Oraea, the values have gone for more than double since October 2012
House Price inflation has been contagious
Auckland was the only area where price values skyrocketed until October 2015 when there was a spillover effect on the rest of New Zealand. Areas such as Waikato, Northland, and Bay of Plenty that has been growing steadily shot through the roof at the end of 2015 and into 2016.
Queenstown is also suffering from the same fate along with Wellington. In total 134 suburbs in New Zealand had median property value increases of 20 percent and above.
Some property markets are still lagging behind
Despite the price inflation in Auckland house price, there are property markets in New Zealand that have never recovered from 2008 crash levels. Eighty-three suburbs (about 7% of New Zealand housing stock) in Far North, Central North Island, East Cape, and West Coast are still below the pre-2008 crash market prices. Luckily, some of these locations have started to experience some appreciation as from October 2016.If You Want To Sell Us Your Property
SUBMIT YOUR DETAILS NOW