Yet again from Samantha Chaudhry Real Estate Corner. From the last couple of weeks I have been continuously thinking to summarize today's property market in Auckland and all I have been able to gather are the words: boom and doom. The house prices in Auckland have risen from around 5 times annual household income in the early 2000s to more than 9 times annual household income today. If house prices were to crash, so the argument goes, we'd simply be getting back to the situation which used to prevail. Surely this would make houses more affordable, which also implies that more people will be able to get in the market. BOOM! The former chief economist says there are likely to be small price falls in the first 3 quarters, and then slight recovery in the last part of the year, "over the 2023 year, prices might rise by upto 7%, but its hard to forecast that far ahead, especially with the pandemic at play. DOOM! The good, the bad, the ugly: The market scenarios 5-10 % rise: Possible but unlikely. Would require a significant uptick in the economy and increased confidence in the lending sector. 0-5 % rise: Likely. In line with most bullish forecasts for the property market. Assumes continued surge in Dunedin and Wellington and increased demand in regional markets as well as improved performance in Christchurch and Auckland. 0-2 % drop: Likely. In line with most bearish forecasts. Assumes recently passed and planned legislation will have a drag effect on Auckland's market and property investors. 2-5 % drop: Possible. Assumes the consequences of a capital gains tax, the removal of tax breaks for landlords and the foreign buyer ban are more severe than expected. 5-20 % drop: Unlikely. Would require major cataclysmic event, such as earthquake or massive failure in the banking system. How's The Mortgage Update Looking? The monthly update from Loan Market's Cam Marcroft says that there are significant indications that the property market is slowing, and house prices are easing. Listings are going up, increasing options for all buyers while building consents have reached record highs. Banks have also opened up the doors to low deposit loans. To know more, Call/text or email me, happy to help!
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