Auckland house prices could climb higher

Posted by MarkL on January 4, 2015

Two leading property experts predict the property market in Auckland will continue to strengthen in 2015. 

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Andrew Bruce, president of the Auckland Property Investors Association and Ron Hoy Fong, a property investment advisor both told Fairfax Media in December they expected the already over-heated market to reach new heights.

With the Reserve Bank unlikely to raise interest in the near future and demand outstripping supply both men saw the price rises Auckland has had last year continuing into this year.

They said there would also be increased interest from overseas investors, especially as the threat of a capital gains tax had been avoided.  

"I don't see it racing ahead, but I do still see it moving forward," Bruce said.

Bruce said there was an imbalance between supply and demand, which was always going to create pricing issues.

Demand for housing was being driven by an influx of migrants, combined with interest rates now expected to remain lower for longer.

But there was also a shortage of available housing, Bruce said.

"I know there's a lot of talk about these special housing areas ... but we've still got to see those houses actually being built." Bruce told Fairfax.

Mr Hoy Fong said Auckland was in the boom period of a normal property cycle of eight to 10 years, which would typically see values double from start to finish, he said.

Hoy Fong said prices still had at least another 35 per cent to climb, and would quite probably overshoot that mark.

The cycle would reach its peak around 2017, or slightly earlier for inner-city areas, he said.

Hoy Fong said he did not believe the Reserve Bank could stop the ascent of the Auckland market, as hard as it might try.

"They can stall it, delay it, but the property cycle is such that properties will still go up."

While the LVR limits had slowed the market,investors had benefited in other ways.

"It just gives us more time to buy more properties, because we're competing with a lot less homeowners," he told Fairfax.