What’s happening in the New Zealand property market?
Much has been said about real estate in Australia, but what about the neighbours across the ditch?
The property market in New Zealand’s largest city, Auckland, has actually been remarkably alike to real estate in Sydney. According to the Real Estate Institute of New Zealand (REINZ), the median property price in Auckland surged 20.5 per cent over the year to August 2015.
What’s more, there has been a 130 per cent increase in the number of homes added to the $1 million club, predominantly coming from Auckland. It’s a strikingly similar situation to Sydney, according to CoreLogic RP Data, with the NSW capital responsible for more than 69 per cent of homes for sale over the $1 million mark.
QV National Spokesperson Andrea Rush affirmed that the burgeoning Auckland property market is beginning to spill out over the rest of the country, as over the three months to October 2015, national sales volumes have been between 36 and 43 per cent higher than the same time 12 months earlier.
“Some of these sales can be attributed to Aucklanders relocating out of the city or investing outside of Auckland, and first-home buyers taking advantage of changes to the KiwiSaver and record low interest rates,” she said.
The nearest major city to Auckland is Hamilton, which has recently been experiencing overwhelming growth. CoreLogic NZ Director of Research Jonno Ingerson stated that values in Hamilton skyrocketed 9 per cent over the three months to October 2015.
“Not only is that the fastest rate of increase in Hamilton since the monthly index series starts in 2004, but when I look at the quarterly index that goes back to 1989, there is no time since then that Hamilton has risen as fast in three months,” he said.
So, what do New Zealanders think of their real estate market?
Property is still the Kiwi Dream
According to a survey of more than 16,000 New Zealanders by QV that was released September 2015, property is a national rite of passage, with the majority of people buying, renovating and selling at least one property in their lifetime.
There were a number of interesting findings, which included:
- More than 90 per cent of respondents owned a property of some sort
- 79 per cent were owner-occupiers
- 38 per cent of those under 40 not living in their own abode owned an investment property
- 87 per cent under 40 had invested in real estate
- Over the 12 months to August 2015, 33 per cent had just bought property for sale or were actively looking
- Of this group, the vast majority were looking for a property investment, rather than a home to live in
- The majority of respondents found capital gains, access to local amenities and the commute time “very important” or “essential”
- Suburb name and school zones were predominantly voted “less important”
Advice for first-home buyers
There were a few wise words taken from some of the interviewees in the survey that first-home buyers can take on board, especially as knowledge is most often gained from experience! These included:
“While Central Auckland is expensive, it is time to look elsewhere. Hard work and saving can mean you can still afford to buy in the region,” one respondent suggested.
This particular interviewee makes a good point, as REINZ statistics show there is a significant price difference between Auckland properties close to the CBD and those further out.
Another respondent stated that “people should look at cheaper not necessarily new houses that they can add value to”. There’s certainly no shortage of ‘do-ups’ happening, as a report from Statistics New Zealand revealed that over 2014, the value of renovations was worth around $1.5 billion.
Regardless of what rung you are reaching for on the property ladder, whether it’s your first or your 21st, a real estate agent can help you make an informed decision.