As very well publicized almost on a daily basis, the Auckland property market is in the grips of rampant demand driven by investors and owner occupiers alike.
The media report that due to high demand, from residents, immigration and investors, a considerable lack of housing stock currently exists in Auckland.
Reflecting global trends for larger cities in stable economies, global economic forces are coming to play. Therefore there being many potential purchasers for Auckland’s dwellings from both onshore and offshore residents.
These factors have seen an unprecedented increase in values, the latest reports stating inflation of 15 plus per annum for the past two years with many investors competing with owner occupiers for the limited stock.
Interest rates being the lowest for many years are also supportive of residential investment where returns on income are at a historical low.
Many economists have expressed opinions on future trends and whether or not the current situation can be described as a ‘bubble’ or long term trend. Much as the relatively recent growth in values was not anticipated, a future trend of either further growth or ‘bursting of the bubble’ cannot be foreseen or foretold. However with historically low interest rates, strong net migration and building of residential property in the ‘catch up’ phase, continued growth in values may well be inevitable.