Henderson Creek
At the very centre of any market is supply and demand, and houses are no exception to this natural law of economics.
Migration into Auckland remains strong and also a natural migration from the high priced markets of Auckland, to less expensive and still attractive markets like Tauranga. Aucklanders are getting great bang for their buck when they move away from Auckland.
Source: Barfoot & Thompson
This is changing the supply and demand in those areas too. More demand from Auckland buyers is pushing up prices on other parts of the country.
Source of Data: landlords.co.nz
Landlords.co.nz did not have date for Te Atatu Peninsula but I will be trying to find better and more relevant information in the future. But I think that it still illustrates what's going in Auckland generally. All the other suburbs showed a similar trajectory.
The number of houses for sale in Auckland has actually been dropping from 2008 as seen on the graph below.
Source: Interest.co.nz
It's one thing to know what is happening, and another to know why it is happening. The why gets debated till the cows come home. But in my opinion the main factors of influence are:
- New Zealand is a great place to live and emigrate too.
- Auckland is the biggest city and therefore the biggest job market.
- Interest rates are very low and this encourages people to borrow.
- Not enough houses to meet current demand in Auckland.
Renting in West Auckland
The average house price, and average weekly rent for a three bedroom property in West Auckland in January 2016
Source: Barfoot & Thompson
Across all of our rental properties in Auckland, there has been a $30 increase over the past 12 months (6.3%). This time last year, we saw a 5.1% increase.
Special Note:
The median house price in Auckland has dipped by about 2% during January and February 2016. It would be absolutely normal for Auckland house prices to take a breather after such an exuberance rise.
Please leave me a comment if you would like to see other information covered in this Market Update.