There’s nothing dramatic about the Auckland property market at the moment, but that’s not a bad thing. As we move into winter, the median price has hovered around the $850,000 mark for three out of the last five months. This is a good sign that stability will continue as we head into the traditionally quieter and colder months. And although prices are no longer on that steep upward curve, it also pays to remember that this median price is driven by fewer $1 million plus properties being sold.
Properties that are new on the market are attracting considerable interest from buyers, but even if your home has been listed for a while, that isn’t deterring purchasers as there are new parties weekly who have just started to look for their first – or next – property.
Interestingly for a region of auction aficionados, the number of auction properties decreased slightly in Auckland from a year ago. Instead we are seeing faster response from buyers for properties listed with a price, compared to by negotiation strategies. Vendors who are considering listing with no price might think about making their expectations more transparent to attract faster offers from purchasers.
If you’re a bit hesitant to employ this strategy, it’s good to remember that the number of houses sold in Auckland last month increased by over five percent year-on-year, so sales numbers remain healthy.
Source: REINZ, June 2018
We’ve had a golden period for the last few years in the world of home loan interest rates. Record low rates have given many of us the freedom to either purchase our first home or service a higher mortgage than in the days of the 6 percenter (or in fact the cruel rates of the 1980s – if you can remember those!). Instead rates have crept up slowly at the speed of a South American sloth and although experts have been predicting interest rates rises for a while, it seems as if this could finally come to fruition.
It’s not greediness on the part of banks; instead The Reserve Bank has warned that lending institutions are being hamstrung by increased funding costs. What funding? Since February the cost of borrowing American dollars for short terms has increased a lot. Corporates here and abroad use these markets to raise US dollars before swapping them for local currency. Because the cost of funds is more expensive for banks in this type of market, banks will need to recoup these costs in some way – and increased rates for home loan borrowers is one such tactic.
As a nation we’ve proved pretty economically resilient over the past few years and we have a strong bank of deposits, but if you are thinking of purchasing a home this year, it might pay to start planning now. Not only are interest rates currently compelling but there is a healthy amount of stock available out there in all price ranges.