The Auckland residential property market got off to a flying start early in the year and shows little sign of cooling in the near future. Photo / Nick Reed
Managing director
Bayleys Corporation
The Auckland residential property market got off to a flying start early in the year and shows little sign of cooling in the near future.
New Zealand's three-speed residential real estate economy - encompassing Auckland, Christchurch, and 'the rest of the country' - is firmly ensconced.
In Auckland, record-breaking immigration figures are ratcheting up demand for homes - either from new residents or investors adding more homes to their portfolios, secure in the knowledge that any half-decent abode will be snapped up as rental accommodation by those new to the city.
While new housing stock will come on to the market this year, the process of subdivision and gaining consents is still slow.
As a result, the simple supply-and-demand curve for existing and new-build homes will continue to put pressure on prices (up) and the volume (down) of homes for sale.
Throughout the regions, annualised capital growth of residential property sits, in the main, around the 1.5 per cent mark. This figure is largely in line with inflation - yet a far cry from the circa 12.5 per cent compounding growth experienced in much of the Auckland housing market over the past few years.
Our analysts see little economic or demographic evidence to suggest the 1.5 per cent growth figure from the provinces will push much higher this year.
NZ chief executive
Ray White Real Estate
Sales continue to be strong, with renewed interest in the provincial areas, while the main cities continue to be positive with record sales numbers.
Lower fixed mortgage rates allow buyers to borrow with confidence and, given the latest five- and 10-year interest rate levels, one could confidently predict that interest rate levels will remain at the lower end for an extended period of time.
In the Auckland market, sales are well ahead of 12 months ago. When you put the spotlight on the Auckland market, with the average sale price continuing to lift to $678,000, combined with the number of properties sold by auction, there is still a high level of competition, and this will continue.
The rental market is tightening, with the apartment market showing a vacancy rate of 2.5 per cent, while the house rental market has a vacancy rate of less than 1 per cent.
This will continue to place pressure on rental pricing and it is expected that some further increases will occur during 2015.
The sales market will see a good supply of new property. This will give buyers and sellers further confidence with regards to the movement of the market.
When you combine this with the low interest rates and the competitive nature, particularly of the main city-fringe markets, prices will continue to rise.
General manager
LJ Hooker and Harveys Group
Many investors with multiple properties will take the opportunity to sell one or two of their portfolio to get their debt levels down and realise the capital gain.
The best-value real estate in Auckland is lifestyle blocks.
These properties haven't increased in value at the same rate as residential, hence you get a lot of property for your money -- usually in a quiet, private position, close to schools and often under an hour from the city.
More and more Aucklanders will sell up and move to more affordable areas. Already we are seeing families moving to areas such as Hamilton and Morrinsville, while Dad commutes to Auckland daily.
The Reserve Bank Governor must be concerned about the bullish Auckland market. Especially with interest rates possibly falling further; this will fuel the market more. At some stage, the Governor may step in and make changes.
Aucklanders with equity in their homes are increasingly buying coastal properties.
With rental properties, vacancy rates are virtually nil across Auckland. Overcrowding is a growing concern as some families are doubling up to save money. It is important for landlords to have occupancy numbers specified on the tenancy agreement.
With immigration set to continue, and most arrivals settling in Auckland, it will continue to be a buoyant real estate market.
Chief executive officer
Harcourts
The key feature of the residential housing market this year will be lack of supply in Auckland, with residential building consents lagging significantly behind population growth.
New Zealand's population of around 4.5 million is expected to grow by up to 2 per cent this year, with around half of those likely to settle in Auckland.
With last year's new dwelling consents at 7595 in Auckland, it takes a simple mathematical equation to realise that the shortage of supply in Auckland's residential housing market will only increase in 2015.
In order to accelerate the construction of new, affordable homes for Aucklanders, more needs to be done to make New Zealand attractive for overseas developers who can provide the capital injection the market is crying out for.
Councils and the Government must also address the speed of the consenting process.
Outside Auckland, we expect to see the property market lift under advantageous economic conditions, more competitive mortgage offerings and population growth.
Regions such as Hamilton, the Western Bay of Plenty, Northland and Wellington, in particular, should all see capital gains, with investors looking for better value outside the heated Auckland market.
Signs are looking positive for the Christchurch residential market. The increasing level of inventory will keep property prices at more sustainable levels, providing relief for buyers after the challenges of the past few years.
Managing director
Barfoot & Thompson
Prices have edged up so far this year, although indications are that price gains for the full year will not eclipse the 10 per cent increase we saw last year.
In January, sales volumes were the highest for a January for years and the values achieved were in line with the all-time high prices in the run in to Christmas.
Trading in early February was buoyant.
At the beginning of February, the property we had for sale represented the equivalent of only two months of trading, and though new listings have eased the situation, choice remains limited.
The greatest pressure point is in the $650,000 to $900,000 price category, where there is a high level of demand but few properties.
The critical shortage of properties in this price category may ease towards the end of the year, when new properties in this price range are expected to hit the market.
Homes in the under $500,000 price category remain sought after, with strong interest from first-home buyers and investors, and sales in this segment represent a quarter of all our sales.
With the prospect of fine weather extending into late autumn, buyers can appreciate the excellent indoor-outdoor living of homes in the $1 million-plus category, and these properties always sell well in the first six months of any year.
Sales numbers in this category are consistently, representing 20 per cent of all sales.
Director and managing director
Unlimited Potential Real Estate
The most commonly asked question these days is: How long will prices keep rising in Auckland?
Alongside that, we have witnessed through the media something of an outcry about how Auckland's values compare to some of the larger cities in the world.
New Zealand's two major property portal sites, realestate.co.nz and Trade Me.co.nz, were founded just 10 years ago, in 2005.
This has enabled New Zealand property to be an international commodity like never before.
With many people desiring a safe haven and the quality of life on offer, Auckland is experiencing a paradigm shift on the world real estate stage.
Why shouldn't we be one of the world's most sought-after cities?
Net immigration is a strong driver and this may not change, short of Government intervention.
With interest rates looking to stay sub-6 per cent for some time, it is hard to see - given the current stock levels - why the market would have much, if any, downside.
Overall, we are experiencing no lessening in demand and an ongoing increase in overall activity.
In summary, Auckland is now firmly on the international radar as a great place to live; clean air, no wars, no terrorism.
We have a lot to be thankful for and the rest of the world is putting a value on it.
Volumes were lighter as investors are thinking more about the summer holidays.