February predictions for house prices

It’s buyer’s choice in February.

From  the Coal face we are finding that there are still quite a few buyers out there looking in the under $1,000,000 price bracket for houses, possibly because of banks easing the LVR levels to some first home buyers and investors. In the over $1,000,000 price range there definitely seems to be fewer buyers out there. In general, houses are taking a little longer to sell and there are more houses on the market for buyers to choose from than there was in the middle part of last year.  This could mean house prices may start to go down somewhat, however we are not finding that to any big degree just yet. Definitely houses are not shooting up in price like they were; those days have probably gone, for the time being anyway.  

Saying all this we have sales on the board already and have many new listings ready to hit the market in February – traditionally a period where houses sell very well.   

What’s the crystal ball reporting?

What is ahead in Real Estate for 2018 is really anyone’s guess and there are as many opinions as there are “experts” in the field.  We will keep you informed of what’s really happening out there.  Having said that Nick Goodall, head of research at Core logic, makes some good points in regards to what is possible in 2018 for Real Estate. 

His four key influencers are as follows…

1) Net migration is likely to drop in 2018 as the Government reduces the in-flow of low skilled migrants and we start to lose Kiwis to Australia again (after gaining for the better part of the last two years). 
2) Consumer confidence is looking like its feelings are a little bit hurt as we move into 2018. The weakness in the property market will be affecting that, but the strength of the labour market is holding it up, and that should remain relatively strong in 2018. 
3) A major influencer on property values is mortgage interest rates. A key part of those is the official cash rate which is tipped to stay on hold for 2018, but many economists are picking some upward pressure on mortgage rates due to the cost of funding for the banks. 
4) While there are ambitious Government targets to improve overall supply, particularly in Auckland, it is unlikely that things will happen fast enough to massively improve the current demand/supply imbalance.

The price pressure is off for the time being

In Auckland, we’ll probably see values remain relatively flat for most of 2018, barring a local or global economic shock. With more properties available, the fear of missing out has been removed, taking with it the previous upwards price pressure.

So that’s all to report for my first newsletter for 2018. Remember if you know someone thinking of selling then now would be the time to refer them to me as we are entering the peak and prime selling months. And remember, advice is free and mistakes costly, when it comes to Real Estate.

Kind Regards 

Drew Miller