U r def right, went to an auction yesterday in mount Eden, ghost house, sold for 1.55million. There were a lot of bidders, he not slowed down. Still has at least a year to go or whatever.
Printable View
U r def right, went to an auction yesterday in mount Eden, ghost house, sold for 1.55million. There were a lot of bidders, he not slowed down. Still has at least a year to go or whatever.
Talking with one of the Guys at work around the housing situation in Auckland.
He was saying that he is moving because the landlord is trying to sell up.
So he decided to go to the action and see how much it went for.
According to him the place didn't sell and alot of the other places didn't either.
Talking with one of the officals at the Auction room apparently sales are down 80%.
Ever since the new LVR was applied to investors a few weeks back :mellow:
Auckland houses will still sell at "reasonable" prices. It sounds as though expectations have yet to adjust downwards - but they will!
Reserve bank this morning "House price inflation remains excessive, posing concerns for financial stability. There are indications that recent macro-prudential measures and tighter credit conditions in recent weeks are having a moderating influence."
Fundamentals don't mean anything when the credit taps are turned off.
This time is not different. By 2019/20 we could see the next trend and real picture.
Thing is, without the ability to borrow, people need more money to push up prices. Otherwise, sellers could push up prices if are disinclined to sell.
Since the LVR has increased, it's possible for prices to continue to rise (even with less sales occurring) if sellers don't believe there's going to be a drop.
Of course, there's speculation (described above) and market factors. I doubt that there are going to be any market factors causing a drop in house prices, as these would need to be things like recessions or a reduction in immigration.
To summarise the above, I think the only way that prices would drop is if the media caused fear of a drop (possibly by publishing results of a lack of sales). However, the thing to remember is that demand is still there due to immigration and lack of choice in terms of investments in NZ AND every time the LVR has been increased these past few years, sales have taken about a 3 month pause, then started up again. Obviously the higher the LVR goes, the less leverage bonus investors get, which is worth noting.
Personally, I'm expecting a pause, possibly with a bit of a drop, OR a pause then continue to increase.
... Well, it looks like the property market has had it's pause and is starting up again :)