Experts expects house prices to fall by 11% once Auckland’s Unitary Plan is finished

There has been an interesting development to the housing market which I thought to share with you.

Interest.co.nz has released an article stating that economic consultants are predicting that house prices will begin to fall in the next two to three years. This is great news for home buyers, but not sellers! The number of new homes being built will increase by 39% over the next two years which could drive house prices to fall by 11% once the new supply kicks in. Currently, incredibly high house prices are being driven up by a lack of supply with multiple people competing over one property at a time. Demand far outweighs supply making it a real sellers market. Importantly, at home in Wellington prices are currently rising as Auckland investors look to cheaper parts of the country to buy. Houses have been selling for up to $500,000 above their RV as buyers compete to secure their property. With the new development in the property market, this won’t last.

Infometrics chief forecaster Gareth Kiernan has predicted that new dwelling consents will hit 40,044 a year in the two years to June 2018, up from 28,387 in the 12 months to May this year. The majority of this increase is anticipated to occur in Auckland, where Kiernan is predicting consents to increase also.

Kiernan said he expects that the construction of new housing in Auckland will begin once Auckland Council's new Unitary Plan is finalised in the next few months, with most of the new houses expected to be higher density housing (i.e Apartments).

"If building activity hits the levels we are predicting, there could eventually be some softening to house prices in Auckland and regional property markets.”

It will be interesting to see what happens. To view the full article, follow this link: http://www.interest.co.nz/property/82758/infometrics-expects-big-jump-high-density-housing-once-aucklands-unitary-plan

Kindest regards,

Vinay Kumar

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