FEBRUARY TOPIC: Auckland House Prices

I often see messages in the media about Auckland Real Estate that are misleading or contradictory. The power of the media in Real Estate and Finance is that their message can become a self-fulfilling prophecy; they perhaps seek to influence rather than report objectively. For some perspective I have simply summarised and compared various media coverage of a particular topic in a single month.


Stuff.co.nz predicts prices to Stagnate
Interest.co.nz predicts prices to Drop
NZ Herald predicts Moderate Growth

HEADLINE: Downturn hits Auckland housing market –substantial fall last month
CONTENT: REINZ median down $50k in Auckland region from Dec to Jan. Up 9.1% on January 2015. Details median for individual AKL suburbs and other cities.
KIM’s COMMENT: This is sensational reporting, it is more likely to be a seasonal slowdown.. Analysing the property market at a micro level from one month to the next has and always will reveal volatility. People don’t buy property one month and sell it the next so it is not relevant.
LINK: http://www.interest.co.nz/property/79956/downturn-hits-auckland-housing-market-prices-and-sales-volumes-falling-substantially

HEADLINE: Residential House Prices in NZ…the last 50 years
CONTENT: RBNZ analyses historical data in housing cycles for the last 50 years. House prices doubled on average every 12 years; adjusted to CPI they have increase 3% since 1965. There have been 6 significant upswings since 1965. Such as the 1970’s (53% increase) and 1980’s (13% per annum) and the 2000’s (77% increase). They were all followed by a price fall. 1975-1980 devalued the 70’s gains completely. The 2000’s gains were reduced by a third.
Auckland began the breakaway ascent in 1981; since 2012 it is up 52% while the rest of NZ is up 11%.
LINK: http://propertyclick.nz/2016/02/02/residential-house-prices-in-nz-the-last-50-years/

HEADLINE: Sellers of Auckland houses now want $100k more than they did last year.
CONTENT: According to Trade Me Property the Average asking price of Auckland property is $160,000  more than 18mths ago – 9% up on the same time in 2015. Small houses showed 10.2% increase nationally, 12% in Auckland. Wellington was up 11% and Christchurch 18%
COMMENT: 9% higher Auckland asking prices in Trademe are consistent with REINZ median figure of sale prices up 9.1% for the year to January.
LINK: http://www.stuff.co.nz/business/76782286/sellers-of-auckland-houses-now-want-100k-more-than-they-did-last-year
HEADLINE: BNZ Weekly Overview 11 February
CONTENT: Auckland steps back as investors move to regions, statics here show great news for the rest of NZ. Prices have fallen in AKL by 3.8% to sit 11.5% up from a year ago. Fundamentals of booming population, housing shortage and construction not keeping pace will see prices steady and rise again for Auckland.
LINK: http://tonyalexander.co.nz/wp-content/uploads/2016/02/WO-February-11-2016.pdf
HEADLINE: Auckland house price grothe may moderate in 2016, Fitch says.
CONTENT: Fitch Ratings predict that the continuing migration and short-supply of housing will underpin modest price growth. Falls in mortgage rates will be off-set by investors moving out of Auckland and Loan-to-value restrictions. Fitch sees Mortgage rates rising in 2017
QV.co.nz predict house prices to decline in the short-term, only to reignite due to low interest rates and supply shortage. Contradictorily also predicting.
Building consents remain well below the 11,000 dwelling required each year to meet demand.
LINK: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11574252