The chief executive of this country's largest real estate agency says house prices in Auckland face more upward pressure and that more needs to be done to create affordable housing in the region.
Harcourts chief executive Hayden Duncan said the company's provisional sales figures for Auckland and Northland show an average selling price during February of $767,254 up from $683,055 in January.
That average price is likely to come under further upward pressure because the number of homes the agency sold in the region during February was up 3.5% compared to a year earlier, while the number of new listings it signed up was down 7.4%, suggesting demand was continuing to outstrip supply.
"We will see further tightening in supply that will continue to put upward pressure on house prices," Harcourts' market report for February said.
"With new dwelling consents lagging significantly behind population growth, we do not expect to see the price pressure in the Auckland residential property market abating this year," the report said.
Duncan said more needed to be done to accelerate the construction of affordable housing in Auckland.
"It's clear that the Auckland property market needs significant capital investment to spur on residential development and that Council and Government must address the speed of the consenting process," he said.
"It is widely agreed now that prices will remain at current levels for a number of years and there simply needs to be a more effective strategy in place to deal with the housing affordability issue."
---------------------------------------------------------------------------------------------------------------------------------------
Our free Property email newsletter brings you all the stories about residential and commercial property and the forces that move these huge markets. Sign up here.
To subscribe to our Property newsletter, enter your email address here. It's free.
----------------------------------------------------------------------------------------------------------------------------------------
14 Comments
I wonder if NZ is coming close to its Ben Bernanke moment. It seems that every commentator is now saying that there is only one direction for house prices and that is up. As a contrarian I can't help but think that we are approaching a top. However I would never bet against house prices in NZ with a National Gov't wedded to ever increasing house prices.
Not sure I agree with you skudiv. I live on a 3 acre lifestyle property only 7 minutes from the middle of a thriving provincial capital. Auckland is great to visit but I would not want to live there as the time lost in traffic would mean less recreation time and more stress when in the car.
Well I only know one, and he doesn't have the equity to do much more then hang onto what he has, and hope things 'come right again'. Was in the wrong town, at the wrong time. With all the equity being built by rising home prices in Auckland, there are sure to be more then a few enterprising people willing to give it a crack.
I used to develop but gave it up, why you ask... Auckland Council. In my opinion they are impossible to have as business partners, accountable to no one and in a world of their own. I realised a long time ago that the easiest way to make money is to buy and hold existing Auckland houses.
One of the whales I know is finishing one a week right now and making about 5m per year; sounds like a lot but they'll also be years when they make nothing. Fact is you need rising land prices for developing to be worth while.
..at least in Australia they are trying...
http://www.dw.de/chinese-forced-to-sell-sydney-mansion/a-18290451
One needs to ask whether Fiat Money can ever deliver affordable housing??.......Fiat money gets value from the relationship between supply and demand rather than what the legal tender is made from. Then there is the intrinsic value to consider.
When the value of a currency is measured by supply and demand then the economy can be fully controlled by those in power!!! And....No one in their right mind invests against the trend !!! When Helen and the Labour Govt started buying up land everyone knew it was a good time to get on the bandwagon......any large off-loads of property that are in the pipeline is an indicator of a change in events!!!!
^ meant Auckland city as that's where the proff jobs are.
notaneconomist I'm confused; Fiat money works fine while money in circulation inreases (through lending) which should mean not only increasing prices, but increasing wages. Two deflationary risks to this I see for NZ are 1) a decline in lending when Auckland finally hits a peak and 2) no room to drop interest rates to stimulate borrowing/activity. Then Government borrowing/spending is required to keep growing money in circulation - why not some housing?
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.