Many people already think Auckland house prices and too high!
Unfortunately for first home buyers it looks like 2016 might see a further increase in Auckland house prices, but for those existing home owners and property investors seeing gains in property value is probably a good thing.
There are always different ways to look at things like this.
Barfoot & Thompson Figures Released
While we cannot always rely on one real estate companies figures, in Auckland a company like Barfoot & Thompson are the city’s largest real estate agency so large enough that we should at least be taking notice of what they have to say.
Managing director of Barfoot & Thompson, Peter Thompson said March was consistently one of the busiest sale months of the year and the number of house sales in Auckland in March was close to double the sales in February and with a median price of $798,000 this represents a 12.2% increase from March 2015.
CLICK HERE to read the Barfoot & Thompson 2016 Housing Market Update.
Predictions For Auckland House Prices
It is very difficult to make any economic predictions and especially to have those published as things can change very rapidly in a small country like New Zealand which is influenced so much by the overseas markets.
But lets have a look the issue of supply & demand.
Peter Thompson, Managing Director of Barfoot & Thompson said “as it has been for the past two years, lack of supply remains the main price driver.”
Nick Smith the Minister of Housing sets house prices – they are a symptom of the market.
Auckland’s Population Growth
Auckland’s population grew 2.9 per cent, the fastest growth in the country, in the 12 months ended June 2015. The city, which now accounts for half of the new residents to New Zealand with population growth meaning an additional 819 new residents each week. (Source: Auckland Council Website)
Building Of New Houses Not Keeping Up
To support population growth there is an absolute need for the construction of more houses in Auckland; however the fact is there are not enough houses being built to support the sort of growth we are seeing with just 344 new homes being built each week. (Source: Auckland Council Website)
What Is Being Done By Council & Government
Both the Auckland Council and Government understand the housing issues facing Auckland and there are a number of initiatives to try and speed up the building process.
This includes boosting the supply of land to build using the Special Housing Areas (SHAs) which is typically on the outskirts where there is land available. This also includes a requirement to provide a level of affordable housing. (Read More: Auckland Council)
There is the Proposed Auckland Unitary Plan encourages more intensification in parts of Auckland with good transport connectivity which has had huge publicity but is still just a proposal. (Read More: NZ Herald)
The processing of building consents is under review to include fast-tracking the launch of an electronic lodgement system for applications, specific measures to speed up processing times and a series of suggestions on how to better communicate with customers. (Read More: Local Government Mag)
Will Auckland House Prices Continue To Rise In 2016?
Auckland housing or lack of it is an issue with no quick fix.
Regardless of what political spin is made about Auckland housing, this is a problem caused by Auckland’s success as a city and is no different to what has happened in many other major cities around the world.
The fact is if nobody wanted to live in Auckland then the problem would not exist.
Of course you could point the finger at Auckland Council and Government (both present and past) as there are things that could have been done better and decisions that could have been made faster or further ahead.
The reality is that while Auckland and New Zealand as a whole continues to be an attractive place for people to live, we will have an issue dealing with supply and demand and therefore Auckland house prices will remain under pressure.
