Rise can't continue at this rate: Helm

Monday 30 December 2013

Property prices are likely to continue to rise in Auckland but will have to come off the boil a bit, says commentator Alistair Helm.

By The Landlord

He has released new data that shows that in the past five years, Auckland house values have increased 52%, or an inflation-adjusted 37.8%.

Almost all of that rise has occurred in the past two years – before that prices were relatively stagnant as the economy recovered from the global financial crisis.

Since October 2011, the CPI-adjusted Auckland median house price has risen more than 29%,  a larger increase than was reported between December 2001 and January 2004, a period which many commentators have said was a level of inflation that it would not be seen again.

Helm said it was hard to tell whether prices would continue to rise this year as they had from 2004.

But he said construction issues and a migration influx would put pressure on. Increasing interest rates would put the damper on a bit, Helm said, but rates of 7% or 8% would still be manageable for many.

“In the short term the trend of property prices will likely be a slowing of growth. That is to say that when property prices take off as they have over the past two years the rate of growth has to slow as rises of 15% or put to 20% are unsustainable -  a 10% or below rate of annual growth is more likely - still seeing prices rise.”

Comments from our readers

No comments yet

Sign In / Register to add your comment

House Prices

S&P forecast 10% house price fall

Global ratings agency Standards & Poors is the latest to join the chorus of predictions around potential house price falls in New Zealand – and they’re picking a 10% drop.


$75m on offer for new developments

Auckland ’s long-term future is sound as well situated residential developments will always sell and demand for affordable housing remains strong, a leading non-bank property financier says.


Mortgage borrowing rebounds in May

New mortgage borrowing rose by roughly $1.6 billion in May as the property market showed signs of recovery from the Covid-19 lockdown.

Site by PHP Developer