New Zealand’s economy is currently growing at an annual rate of around 2.5 percent, supported by low interest rates, construction activity, and high net immigration.
However the growth outlook is now softer, as the rebuild in Canterbury appears to have peaked, and the world price for New Zealands dairy exports has fallen off sharply. House prices in the Auckland region continue to increase rapidly, but outside Auckland, house price inflation generally remains low. Increased building activity is underway in the Auckland region but it will take some time for the imbalances in the housing market to be corrected, as consents continue to fall below the targeted housing accord aspirations. The RBNZ reasoning for the July reduction in the OCR to 3% was due to the softening economic outlook and low inflation, with further reductions likely in future.
Ponsonby and surrounds (Freemans Bay, St Marys Bay, Herne Bay, Westmere, Pt Chev and Grey Lynn) has some of the highest value real estate in the country, and the median sale price hit unprecedented levels in the first quarter of 2015, peaking at $1,350,000, but has eased slightly in last quarter. In the quarter to June 2015 the median sale price for these suburbs combined was $1,315,000 according to the Real Estate Institute of New Zealand (REINZ). This equates to a $139,500 increase from the June quarter twelve months prior, or about 12% growth.
Quarterly sales volumes have been trending upwards following the Global Financial Crisis (GFC) low of only 120 sales in the March 2008 quarter – activity levels have recovered strongly but are yet to reach pre GFC 2006 – 2007 highs. The December 2014 quarter hit a healthy 278 sales in the Ponsonby and surrounds region, following a slight dip to 195 in the March quarter, June 2015 closed off with 200 sales, a 75% increase in transactions from the June 2014 quarter.
Attractive borrowing rates, combined with record immigration numbers have all fed the demand side of the housing market, bringing about some of the tightest market conditions ever experienced. Read more...
Spotlight on Herne Bay
Home to some of Auckland’s most expensive real estate, Herne Bay was the first suburb in New Zealand to hit a monthly median sale value of over $2m in May 2015. Located to the west of the Auckland Harbour Bridge, a majority of the majestic homes in this suburb enjoy views of the harbour and city while being a short trip to central Auckland, only 3 kilometers away. Read more...
Spotlight on Grey Lynn
Grey Lynn, an inner residential suburb located three kilometres to the west of Auckland CBD is centred around Grey Lynn Park has seen an unparalleled increase in median price and sale volumes over the past few years. Grey Lynn’s median is now $1,265,000 for June 2015 up 13% on the same period a year earlier, equating an increase of $150,000. Just two years ago in the June 2013 quarter, sales in Grey Lynn were sitting at a median price of $995,000 27% less than the values now according to REINZ. Sales volumes in the June quarter were up slightly on the same quarter a year prior, although average days on the market dropped slightly from 40 down to 38 days to sell a home on average. Read more...
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