Stats bode well for Auckland housing: Trass
Seldom have the signs boded better for the Auckland housing market, according to Mortgagenet principal Kieran Trass.
Monday, November 19th 2001, 4:38PM
by Jenny Ruth
"I’m not saying get ready for a boom. All I’m saying is that the positive indicators I’m seeing I haven’t seen for a long time," Trass says.
First there’s the median house price. After being stuck in a rut for the past few years and the traditional winter softening, Auckland house prices are now clearly moving higher. The median price across the Auckland region troughed at $235,000 in May but had risen to $258,000 in October compared with $233,000 in October last year and $232,000 in October 1999.
People are more inclined to buy a house if they believe values are rising.
Then there’s employment. The latest figures show the unemployment rate in the September quarter stood at 5.2%, its lowest level in 13 years. That compares with 10.9% peak in September 1991.
So it won’t come as any surprise wages are growing. The figures for the year ended August showed total wages, including overtime, rose 3.4%.
People are more likely to buy houses if they feel their employment is secure and wages are rising.
Then there’s migration, which has a huge impact on the Auckland housing market since most migrants settle in Auckland.
After the "brain drain" of recent years, New Zealand is again gaining migrants rather than losing them. Arrivals exceeded departures by 3,500 people in September, up from 1,500 in August and 800 in September 2000.
"While it’s not looking like a flood, we don’t need that much," Trass says. As well, he’s gaining more business from Kiwis living overseas but wanting to buy houses in New Zealand. "If enough of them started investing …"
And then there’s inflation. While it’s become a dirty word in New Zealand over the last decade, even a little is music to the ears on anyone investing in property.
While the annual pace has fallen from 3.2%
in June to 2.4% in September, the Reserve Bank still expects it
to remain towards the top of its zero to 3% target for a while
yet. Its latest forecast is 2% for the year ending March next
year.
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