The undeniable fact is that New Zealand is no longer a single property market. There is an Auckland property market and then the remainder of the country.
This polarisation has been much discussed this past year and is not likely to change. That is the first certainty of a 2015 forecast for the property market.
That divide between Auckland and the rest of the country will only grow. Christchurch, of course, continues to experience its own unique set of circumstances, with these drivers still a few years yet to run as the pace of construction starts to match the demand of a resurgent city.
Most people when seeking a perspective on the future trends of the property market naturally want to know if prices will rise or fall, and by how much?
The driving impetus of property prices is demand created by easy access to finance at a reasonable interest rate. Current interest rates aided by competition amongst the banks are now seen as likely to be stable for the majority of 2015, which will provide the stimulus for the property market.
Key to any growth in property values is the leading indicator of sales volumes. Volumes fell consistently throughout 2014. Looking forward through 2015 as the threat of interest rises diminishes, volumes are likely to rise. The Auckland market was artificially held back through the final quarter of 2014 in the anticipation of the release of the latest local authority capital valuations, which having been published in early November provided a greater certainty for buyers and sellers.
With this backdrop of stable interest rates, rising sales volumes and an economy growing at a healthy rate, there is a strong likelihood that property prices will maintain a growth of around 5 to 8 percent in the coming year.
Now this is the scale of the increase for Auckland and represents a slower rate than seen during most of 2014; as ever with property cycles, the bulk of any price increase comes front-loaded and 2015 should be seen as very much mid cycle.
As for the rest of New Zealand, increases are likely to be at best patchy and of the order of 3 to 5 percent.
Having proffered price increases of a more modest level, homeowners should derive comfort in seeing sales volume rises, as this indicates a healthier market, one where buyers and sellers are active – that is the good news for 2015.
Alistair Helm is a property commentator who regularly reports on and analyses the property market and the real estate industry.
He is the founder of Properazzi a rich resource of insight and analysis on all things related to property and the digital transformation of the real estate industry.
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