The number of sales of dwellings including apartments in Waitakere City for August was 284. There were 11 sections sold. The median selling price was $762,000. The average days to sell was 37.

Capital Gains August 2012 – 2017 Median Prices

Green Bay            64.3%

New Lynn             86.7%

Royal Heights     109.2%

The number of sales of homes in Waitakere City for August was 284, this was up from last month. Prices also increased by 3.8% over July prices. These figures reflect increased prices and sales numbers across Auckland as a whole. Sellers are not willing it seems to sell below the prices they saw similar properties to theirs sell for a few months ago. There is little doubt that the shortage of houses is getting worse in Auckland as demand is exceeding the rate of building new ones.

On that basis prices would be expected to rise. Factors likely to hinder price rises however are (1) the tight lending requirements from banks mainly  because of the LVR (loan to value ratio) restrictions imposed by the reserve bank. (2) A change of government as a Labour led government would:

A. Restrict immigration which would reduce demand and slow many sectors of the economy such as hospitality and horticulture which are already short of workers and rely heavily on temporary immigrants / seasonal workers.

B. It is clear that there are not enough construction trades workers and immigration restrictions would prevent more houses been built.

C. Capital gains tax rise on any rental house purchase would mean less buyers for rental properties so prices would be inclined to fall. At the same time a sever shortage of rental properties could ensue. This rental shortage would tend to drive up rents but the government could well put restrictions on rent increases.

D. It looks likely that when a deceased estate property is sold it would not then be classed as a family home and so could be subject to capital gains tax. This is what people are calling an inheritance tax. If that became the case a properties market value would be less. Nothing is certain in life and this is especially true of the 2017 general election.

Do you want to know the value of your property? Its probably worth more than you think. Contact me for a free no obligation value update.

Best wishes,

John Goodrum

Licensee Agent REAA 2008

021945140

thelegendofthewest@gmail.com

Welcome to the twenty-seventh edition of the West Auckland monthly Residential Landlords Newsletter.

I am a landlord myself and have been for over 30 years. I currently own rental properties in South Auckland, the North Shore and of course West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well.  

In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.  

Regular features will include: 

• Current sale prices
• Current mortgage rates
• Current rents
• A monthly suburb spotlight review
• A relevant feature article each month       

                                                                     Source REINZ

Source – J Goodrum – Internet search

 Source NZ Government building & housing

Source NZ department of statistics

Housing Shortage and Earthquakes

We already have a housing shortage in Auckland estimated to be around 40,000 houses. The problem is getting worse, not better. Auckland needs 13,000 new houses each year just to take care of the growth in the city’s population but last year there were only 9,700 building consents and not all of them will get built. New Zealand net migration is now sitting at a high of 70,000 for the year to September 2016 and a large portion of these settle in Auckland. 

The problem of building more houses even if more land is made available and Auckland Council is made by the government to speed up the process, is that there simply isn’t enough builders and tradespeople available. This was the case at the beginning of this month. Now, following the 7.8 magnitude earthquake and the many aftershocks around Kaikoura, there is a lot more homes to build, repair and strengthen in many places in New Zealand, including Wellington.  

This is going to worsen the availability of builders, tradespeople and contractors to develop bare land into residential subdivisions in Auckland as people and machinery are needed for infrastructure and building work elsewhere. 

What is the implications for house prices in Auckland? They will increase in price due to the increased cost to build as tradespeople will be able to charge more for their services, putting up the price of new builds and this will relate to increased prices for exiting houses. 

You can “tinker” all you like with LVR and so on but it basically gets down to economics 101. 

1. SUPPLY = DEMAND……..steady prices
2. SUPPLY greater than demand…..falling prices
3. SUPPLY less than demand……increasing prices. 

We are likely to have condition 3 for even longer now, perhaps 3 or more years. 

Until next time, 

Best wishes,

John Goodrum

Licensee Agent REAA 2008
021945140