3 Key reasons in Auckland’s house prices
Auckland’s median house price has hit $1 million for the first time and October 2020 will go down in the housing history records. Nationally the house prices have also risen by 20 per cent in a year. This does make it hard for the first home buyers, but surprisingly with interest rates as low as ever people are still buying to get on to the property ladder.
People were expecting recession with this global pandemic situation we have on our hands right now, but it looks like we are far from recession and rising more then ever. Auckland movers have been busy moving kiwis into their new homes.
So, what are some of the reasons Auckland properties are rising at such speed?
- Loan to value restrictions (LVR) – These are temporary limits on the banks to bring down the amount of low deposit mortgage lending. In April 2020 reserve bank announced the removal of LVR restrictions and now in November reserve bank has put this back up for investors.
- Lower interest rates – The interest you pay on the loan you take out from the bank to pay for your property. It is the lowest it has ever been and trending to be lower by April next year.
- Shortage of houses – Currently the shortfall of houses in Auckland alone is estimated to be at 28,000 over the past decade. Declining as we have more New Zealanders returning home and net migration rising in Auckland with 40,000 people per year and more migration rise expected next year after Covid-19.
The rise in the properties could be to do with interest rates being low, LVR restrictions being removed, shortage of houses and maybe New Zealanders returning home during this pandemic. It is range of things that are the reason for the inflation in housing and not just one.
Some landowners are selling properties even if they did not plan to sell this year, just because of the rise and profit seen in selling the house. So, with less houses on the market it drives a lot of attention and properties are being snatched day to day.
The property that is getting the most unexpected rise in value is the one with land and area that has the future to be developed. Developers are buying properties left right and centre for future development. It is said to be the best time to sell if you have properties or you are looking to move out of Auckland.
This is also the year for real estate agents as they are selling properties and getting higher commission then expected. At this point they do not have to go out and look for people looking to sell their home or people buying properties. People are approaching real estate agents themselves. Indeed, a great year for the property agents.
With so many properties being sold, it is expected that a lot of people will be on the move prior to Christmas and in start of the new year 2021. So at this time furniture movers Auckland will be as busy as ever before and this could be the right time to book it in advance if you are looking to move houses soon.
Let’s hope this global pandemic is over sooner than later and we are all able to travel again and see our families across the world. New Zealand currently is safe and surviving the pandemic, but you never know when it could re appear in the community. So, let’s all stay united and keep fighting through bad times like this and come out stronger.Google