New Zealanders are back behind desks - with one eye on the next long weekend, and the other on what 2016 will bring for them over the course of the year.
The question of how the residential property market will unfold this year is also coming into focus.
Many property owners and investors may still be catching their breath after the residential property market sprint through the first three-quarters of 2015, while others will be revising their positions for 2016.
Though the market temperament has cooled somewhat, buying a new home, or adding to the residential investment portfolio will remain a priority for many Kiwis, and the Bayleys sales teams are ready to meet this demand.
Bayleys is forecasting a much more subdued period of capital growth over 2016. The big ‘what ifs’ which will decide just how much that capital growth will be are the return of investors to the market, the continuation of the Auckland ripple effect with big city dwellers buying up in the provincial cities, and how quickly offshore buyers get to grips with changes to legislative requirements regarding their personal banking and IRD details.
As for some of the factors that sustain demand for residential property, such as migration, mortgage interest rates, employment, and housing stock availability, Bayleys research and official economic data give an indication of the broad picture of the market settings.
Net migration numbers are still at record levels, and show little signs of easing. Even if a small to moderate degree of easing did occur, there would still be huge numbers of new residents coming into New Zealand, or expat Kiwis returning home. New Zealand had a net gain of about 60,000 people last year, and these people will all need somewhere to live.
The Official Cash Rate is still at historically low levels, meaning fixed term mortgage rates of sub-five percent are everywhere. Most bank economists are forecasting stability with the OCR at its current platform for at least the first half of 2016, with a ‘steady as she goes’ approach pending for the second half of the year. Some economists are even picking the OCR will go lower.
Employment is still in a healthy range, with no unduly concerning factors looming large on the economic horizon.
Supply of new build housing stock, particularly in Auckland, is still not meeting the demands of a growing population – thereby underpinning current values for the foreseeable future.
Economists also believe though Auckland is cooling, the correction could be short-lived, as the scenario will encourage first home buyers back into the market and the supply of homes will remain tight. In short, the underlying supply and demand imbalance in the ‘city of sails’ is not going anywhere fast.
This could allow the regions to continue to shine - with some banking economists picking investors will keep looking for properties outside Auckland where they can achieve higher rental yields. Whether the story for 2016 emanates from Auckland or the regions, the Bayleys sales network is ready to facilitate.
Next up on the 2016 agenda for Bayleys’ marketing activities is the Big Call - one of New Zealand’s single biggest residential auction campaigns, selling numerous homes and apartments under the hammer over an intensive five-day period.
Following a proven long-term formula, the Big Call is expected to once again generate impressive results for vendors, and provide house hunters with the opportunity to canvas a wide range of properties from across the greater Auckland and northern region.
Whether it’s to buy a first home or to add to the investment portfolio, be sure to check out the Bayleys Big Call listings to view some of Auckland’s best residential opportunities – many of which are showcased in this edition of Preview magazine.