Derryn Mayne, owner of real estate firm Century 21 New Zealand, believes that 2020 will be the best year for Auckland real estate that the industry has seen in the past three to four years.
Her comments follow the release of CoreLogic’s QV December 2019 House Price Index, which highlighted the recovery of property values in Auckland – with a 1.9% quarterly growth to close out the year being the strongest rate since November 2016, taking the average value of Auckland property to $1.047 million.
“Interest rates are low and are expected to stay at record-low levels, while rents continue to rise. What’s more, with Government-backed schemes for first-home buyers now requiring only 5% deposits, I think we’ll see more first-home buyers taking the plunge. Conditions are also ripe for next-home buyers to extend their mortgage for a bigger or better property,” Mayne commented.
Read more: Low interest rates would help the market bubble along – Century 21
Mayne expects business and consumer confidence to strengthen throughout the year, adding to the “feel good” factor that the real estate market always benefits from.
“Many regional towns and cities have enjoyed strong price growth in the recent years while Auckland has taken a breather, bringing the city’s house prices back to more sustainable levels. Now Auckland looks set to get back in the driver’s seat,” she said.
She also pointed out that the Reserve Bank of New Zealand (RBNZ)’s tougher loan-to-value ratios (LVRs), the government’s foreign buyer ban, and Auckland Council’s unitary plan releasing much more land had made an impact on the Auckland market.
“The main issue for Auckland real estate in 2020 won’t be around a shortage of buyers, but a shortage of sellers. We’re already seeing that this summer with many Kiwis willing and able to borrow money cost-effectively, but sadly there’s just not the listings to satisfy them,” she continued.
“With Auckland on the rise in 2020, I’d encourage prospective buyers to make a move sooner rather than later. At the same time with fewer competing listings around, what a great opportunity for vendors to attract interest.”