It’s no secret that the Auckland housing market has been expanding rapidly and unsustainably over the last year or so. In March this year, median house prices reached record highs at $400,000, and this has triggered a large degree of concern within the financial sector about the ongoing stability of our economy in a post-recession climate.
The result of this – the Reserve Bank imposing restrictions on high LVR (loan to value ratio) lending. These restrictions have been decried by critics as shortsighted and potentially ineffective, and as such have be under scrutiny in the media and parliament. However even more criticism has been ignited over the fact that they make it even harder for first home buyers to enter an already inaccessible property market.
Because of this, potential homeowners have been acting rapidly to circumvent these measures before they must legally be enforced on October 1st. As such, the market has been expanding even more rapidly over the last couple of weeks, as those who may have otherwise waited have jumped into the fray whilst they can still are able to do so.
The net result? Sales driven even higher! In recent weeks, the housing market has been booming more than ever. Between July and August house prices increased rapidly- with a median sale price of $390,000. That’s $5000 dollars more than the month before!
Considering that the number of houses sold had fallen from the month prior by 3.4% to 6,548 these are telling figures, and offer a glimpse into the wider market today. The reason that the number of houses sold has fallen whilst there are more buyers is simple- there are simply just not enough properties available for sale. Supply is far surpassing demand, and as a result properties are selling for much more than they are worth, particularly in areas where the demand is the greatest such as Christchurch and Auckland.
However for those hoping to get in fast before the October 1st deadline, they may now be out of luck. In the last week or so, many lenders have decided to start imposing the restrictions in lending criteria early.
There are other options though and you may be pleasantly surprised by the rates. Give us a call on 0800 466 369 or email us about a mortgage.
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