Auckland House Prices up 30%!!!

Auckland houses

Two articles in the New Zealand Herald are tipping that house prices are about to rocket by up to 30%! This, along with predictions that nationally they will rise by 24 %.

Infometrics state that house prices will rise by more 9% per year for the next three years, caused by immigration and growth in the Auckland area, accompanied by a housing shortage and low interest rates. See the article here. There is an accompanying article on the national house price prediction: a 24% rise over three years.

Meanwhile, Bill English muses that the way to prevent a “premature boom” is to introduce a capital gains tax, he better get in quick while we still like the National Government. The is nothing surer that the honeymoon with the Bill and John Key would be well and truly over should a capital gains tax be introduced, but John says that would be better than raising GST to curb spending. Oh boy!, Hobsons Choice! Here’s what Bill said.

And Bernard Hickey? What does he say? Well down by 15% (not 30%) by the end of 2010. Why: because house prices are still not affordable for the average person, and rental yields do not justify the prices paid for property. Bernard’s big concern is that the major banks will start borrowing cheap money from off shore. Remember New Zealand’s interest rates are still high by international standards. He has an excellent and persuasive article here!

What does all this mean? It is difficult to see that New Zealand’s love affair with property will wane despite the calls from our leaders and economists that we must start investing in “productive” assets. One thing we do know is that right now, it is a good time to sell, probably the best it has been for 18 months.

This spring looks like being a doozy if you are selling. Call me on 0800 61 8888.