Market Ahead

Its been a patchy year, in Auckland. Auckland flat and rest of Auckland still moving upward at a little over 8% in terms of the median house (REINZ). The drivers behind the housing market is still putting in some pressure in the market even with a 40% deposit requirement for investors.

Nett migration for the past five years has been amazing compared to the previous very flat years.

Are we building enough house yet to ramp up supply?

Not really, we have slowly ramped up to the same numbers as the peak of building in 2004. Government initiative seems like a step in the right direction. However the downardly revised plans of 15 houses within the next three years might come at a cost. That cost might be diverting resources away from the private sector.

The real driver?

Lots of money floating around globally, the Federal Reserve in the States have quadrupled their money supply in the past nine years.

Government changes to slow things?

The changes seem pretty understandably, healthy homes bills might add another three to five thousand dollars to the cost of setting up a rental investment. This would be from insulating or adding heating. Most of my investors tend to do a general tidy up before renting out a property already, so not a big change there. The fact that negative gearing will be gone might mean a search for better yields. However the losses will be most likely be able to pushed forward till the rents get high enough to use them. So again not a big change for the long term investor.


Exciting times, on the horizon the Americas Cup could bring some confidence in. Also expect a rush to get in before any capital gains tax if Labour is looking likely to get reelected next term.