Is Auckland Housing Market Heating Up as Confidence Returns

Auckland’s housing market is experiencing a resurgence in activity, with some real estate agencies reporting its busiest sales month in two years. The average sale price in Auckland has reached $1.2 million, reflecting a 10% increase from the previous month.

This positive outlook comes after a period of decline caused by rising interest rates. However, analysts caution that the national property market remains subdued, with a national increase of only 0.5% in the past month.

The increase in Auckland is attributed to a combination of factors. Firstly, a significant rise in net migration to New Zealand, with over 133,000 people arriving in the past year, is driving demand for housing. Secondly, a slowdown in new home construction is putting further pressure on a limited housing supply.

Despite the current economic climate, some potential buyers, like John and his wife who recently purchased a property in South Auckland, are taking the plunge to secure a home before prices climb further.

Policy Changes and Market Predictions

Recent government policy changes aim to impact the property market, including reinstating interest deductibility and shortening the bright-line test period. Economists are revising their house price predictions for 2024, with most now expecting prices to remain flat.

Construction Activity

The latest building work data reveals an increase in the annual value of construction work in 2023, primarily driven by non-residential projects like offices and healthcare facilities. This growth may reflect both higher construction volumes and increased material and labor costs.

Commercial Property Sales

The program showcases a selection of recent commercial property sales by the company, including office warehouses, industrial spaces, and premium investment properties. The report suggests a pick-up in commercial property market activity.

Global Residential Market

Globally, prime residential property prices in major cities have shown positive growth, with several New Zealand cities, including Wellington and Christchurch, experiencing increases above 5%.