tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 10th, 9:59PM

News

rss
Latest Headlines

Bubble risk for halo regions

Skyrocketing price growth in “halo” markets near Auckland far outweighs the population growth and this puts those markets at risk of a housing bubble, new data suggests.

Tuesday, April 4th 2017, 11:00AM

by Miriam Bell

Property information website Homes.co.nz has released data comparing the rate of house price growth and population growth in regions surrounding Auckland between 2012 and 2016.

Over that time, Auckland’s house prices have grown by a hefty 69.42% since 2012 - but that has been matched by steady population growth of 9.34%.

However, the data shows that this is not the case for many of the regional markets surrounding Auckland.

Most regions within a couple of hours of Auckland neighbouring areas have seen a huge spike in the last 12 months that has clearly outpaced any pressure from population growth.

For example, Whangarei has seen price growth of 38.06% since 2012, with a significant part of that coming over the last year, but it has seen just 5.80% population growth in the same period of time.

Homes.co.nz spokesperson Jeremy O'Hanlon said there is a risk that the price spikes in regions surrounding Auckland are due to speculation rather than housing shortage due to population growth. 

“While there has been population growth in almost every area, what is alarming is the significant jump in pricing that doesn't correlate in a significant jump in population growth.

"If there is no fundamental change in the demand for something and prices start sky rocketing, it's reasonable to assume that speculative investment is the culprit."

For such markets, this presents a problem as it means they could be at risk of being in a bubble and it means they could be facing price reductions should a downturn kick in.

Even a market like Hamilton, which has emerged as one of the star markets of the current housing boom, is at risk, O’Hanlon said.

“Prices in Hamilton are growing exponentially with prices increasing by 7.8% in 2014, 11.7% in 2015 and 25.6% in 2016. But population growth has remained steady at 2-3% per annum.

“Tauranga is a little different in that it had its huge push earlier on in 2015, and it has shown aggressive population growth throughout this time.”

For investors thinking of buying in some of these regional markets it pays to tread carefully and do solid research into the area before jumping in.

"If you're investing in areas where fundamentals aren't supporting price growth, be sure to do your due diligence and find properties with long term yield,” O’Hanlon said.

Read more:

Watch out with regional bargains 

Following the halo 

« Tackle restrictions on development - reportAuckland market different now – B&T »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Harking back to the old days
    “Tactical move by CIGNA and looks like they have a lot of bench strength now in sales, underwriting and product / pricing...”
    6 hours ago by hitting rock
  • Greens want ACC extended to cover sickness
    “Never happen. The Greens are such an aspirational bunch. Must all the weed. They 'want' all sorts of unlikely things...”
    9 hours ago by All hat no cattle
  • Harking back to the old days
    “Really positive news. NZ has been blessed by many successful leaders and it is good that their skills can skill be utilised...”
    15 hours ago by Francis L
  • Harking back to the old days
    “I dare say Cigna just got that extra grunt it's been looking for....”
    16 hours ago by Matron
  • Greens want ACC extended to cover sickness
    “The Greens have no idea The purpose of the Woodhouse report was to remove the "at fault" component of accidents Sickness...”
    1 day ago by LNF
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 10 July 2020 9:02am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com