Growth in Auckland units?
Question from Adam updated on 16th September 2013:
I'm a new investor looking to spend $300,000 to $400,000 in Auckland. What is the capital gains outlook for units in Auckland? How would a unit in a high-growth, inner suburb (such as New Lynn) compare to a stand-alone house of equal value further out? Will units continue to sell well?
Our expert Kris Pedersen responded:
Hi Adam, most economists expect Auckland property prices to continue growing over the short to medium term as we continue to have major supply issues which are going to be exacerbated further as internal migration is start to increase. I note also that inflation construction is starting to rise so expect rises in regards to both labour and material costs which are likely to push house prices up. It is hard to say how growth will go comparing inner suburbs with a property further out but with property cycles there tends to be a ripple affect which is mainly driven by owner occupied purchasers. Basically purchasers get priced out of suburbs and so start looking at the next suburbs which are further out so the cycle tend to flow outwards. because of this it means that you may be able to get a purchase at a discount further out as there may not be as much heat in the market in these suburbs yet. In regards to units note that as long as they are at least 50m2 and not multi level (otherwise some lenders will characterise them as apartments) then they shoulds still continue to be sought after and sell well. Regards, Kris Pedersen
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz