As the election fades behind us, Auckland property buyers and sellers are stepping out into the market and once again showing the popularity in Auckland’s property market. With the median house price having risen up 11.3 percent from this time last year to $691,500, economists are crediting the post-election Auckland property boom to low fixed term interest rates and a growing population.
QV has said that the re-acceleration of property prices in Auckland on the residential price movement index chart has meant that some areas have seen a five percent gain in their property values in the past three months. Overall a 9.3 percent rise in the past year for most properties has seen many owners selling to cash in on the higher amount of equity in their property.
Auckland property sales up 17.7% from last month
Real estate agents Barfoot & Thompson say that November is traditionally a busy month for buying and selling property and especially this year because the uncertainty surrounding the election had ended. Interestingly though was that homes under $500,000 made up only 20.4% of their total sales during the month. This just shows how much pressure first home buyers are under when looking to buy in the Auckland property market.
Record prices have been made at auctions for properties over $1 million, with Barfoot & Thompson saying that they now have over a third more properties in this price range on their books. With high numbers attending auctions and demand for these top price properties growing, Westpac economist Michael Gordon sees a rise in interest rates in the shorter term more of a possibility.
Reserve Bank unlikely to lower LVR in near future
With lower fixed term interest rates proving popular, Gordon does not believe that the Reserve Bank will lower the high LVR within the near future. The chances of the high-LVR [loan-to-value ratio] lending restrictions being removed any time soon are looking increasingly dim, and says that this is in part due to the continual rise in demand of Auckland properties.
Property investors are taking advantage of the LVR as first home buyers are continuing to be pushed out of the market through being unable to raise enough of a deposit to satisfy lenders. In fact data has shown that investors are buying more properties than they were this time last year due to the smaller amount of competition for properties within the lower price range.
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