Investment Advice, The Aucklander
Thursday October 8, 2009
by Tanya Kwasza
What is it about spring that injects activity and life into the housing market and is this year going to be any different?
In the last 20 months the market has been in hibernation however recently we have seen a huge increase in inquiry and even multiple offers on good properties. So what has caused this awakening of the market? Recently the NZ Herald printed an article entitled “Auckland house prices tipped to rocket”. What has prompted such a sensational headline?
The Auckland papers are now filling with positive articles about property as opposed to the protracted months of doom and gloom. We seem to be in the grips of the age old cycle again. As sure as the tide these cycles continue to operate even in the face of intellectual, economical and philosophical musings that the world will never be as we know it. Some people I have encountered even spoke about property prices not rising for a generation after having completed a world tour and global macroeconomic analysis. I believe that in all the months of negativity people have overlooked the following, cycles are by laws of nature recurrent events. They have also overlooked the fundamental laws of supply and demand. The aforementioned article made reference to the shortage of available properties for sale.
The number of new housing consents have almost halved in the past year. To add more fuel to the fire the Hon Phil Heatley, Minister of Housing recently announced a helping hand for first home buyers increasing the maximum loan in Auckland under the Welcome home package from $280,000 to $350,000.
So now investors can expect to be competing not only with more and more investors being drawn to the market by the positive press, but also with first time home buyers. Yet the pool of stock remains very limited.
What does all this mean? Well perhaps the NZ Herald’s sensational headline is not sensational at all and the annual spring rush has already started. This reiterates my belief that you must take a long term view to property investment and not a seasonal view.
Contact Tanya Kwasza for a personal consultation at 0508 CATALYST (0508 228 259).
