There are many people watching what is happening over the ditch in Australia possibly worried that the ramifications could happen here as well. And with changes happening to the housing sector, some investors and buyers get cautious with the effects these changes could have on the market.
But for over three years the Market has remained at an almost continuous stable median even f prices raise slightly or fall slightly with weather trends or adapting to changes in law.
It was reveled recently that as we head towards the warmer weather, the local market is already beginning to warm up, with slight renewed confidence returning to the market. This is according to the Real Estate Institute of New Zealand’s latest House Price Index (HPI) figures which revealed that in Auckland the HPI was up 0.1% in June compared to May, but down 1.7% compared to March and down 3.5% compared to June last year.
Those watching the market may be cautious to call this a trend, but REINZ chief executive Bindi Norwell believes the small uplift could be a renewed sign of confidence in the market, “While the annual figure shows a fall of 3.5% in the value of the Auckland property market, the last two months have shown an uplift of 0.3% from April to May and 0.1% from May to June.”
Despite sluggish sales prices across the winter period, the median house prices across the country have remained quite steady with the national median selling price in June being $585,000, up slightly from $578,000 in May, and equaling the record price set in March. In Auckland, prices have also remained stable as they continued on the steady course of the last three years, currently sitting at $850,000 – unchanged from a year ago.
The stable market along with other factors has also lead to the Reserve Bank Lowering LVR’s and even suggesting removing them altogether, after putting them in place in 2013 to control household debt, and protect from the market crashing. Despite the positive effects of the lowering of the LVR’s, such as mortgage rates dripping ad first home buyers returning to the market, there is still concern the decision would be pre-mature. the International Monetary Fund has cautioned the Reserve Bank about further loosening of speed limits on LVR’s, warning of the “risks to financial stability from elevated household debt” and that that mitigating supply constraints is critical for improving affordability.
As we head into summer and a to the end of the year where more announcements are expected, it will be interesting to see where the stability and market heads to, with so many people optimistic, while other cautious, it’s an interesting time to be invested in property.