New Zealand’s housing market pressure is currently one of its biggest economic issues. Auckland specifically, has shown the least promise with property growth. Since last year, property experts have continued to discuss its chances of achieving stability with bleak results.
There is an estimated underbuilding of about 35,000 homes and the affordability pressures are a major problem. As population in the North Island city continues to rise, it will take longer, perhaps 10 years of consistent building to resolve the housing needs of the area. The news is that Auckland’s housing woes will likely get worse before it gets better.
Auckland is a lovely city but can you afford a home here?
Two major problems with Auckland are:
· Housing shortage
· Pressure of housing affordability
For a long time, Auckland has had a tighter housing market than other regions in the country. This is clearly represented by the high number of people per-living in the city. But the situation has tightened significantly because of its growing population and slow home building activities.
However, the property market picked up slightly in March after slow sales period in January and February 2017. A total of 1,110 properties were sold at an average $968,570. This is a 4.8% increase in the price average over the previous 3 months, but it is not clear if the trend will continue in the coming months.
A silver lining for other regions
Some experts see the property issues in Auckland as a boon for neighbouring cities. This once thriving housing market has seemingly stepped down to ‘give’ other regions a chance to grow. For instance, Te Anau is now booming- a highly unexpected outcome. Other promising areas include Cromwell, Wanaka – and surprisingly- Invercargill, which has the potential to shine in coming months.
Te Anau has more blocks equipped with brand new homes, all filled up and costing about $700,000. Cromwell, though more expensive, is rapidly rising upmarket. Invercargill is a dark horse coming from nowhere with new intelligent new business strategies and aggressive commercial developments such as CBD growth and smart restuarants.
As property investors and pundits continue to watch the trend, Auckland investors can only hope things turn for good, and soon too.
