Why has Auckland grown so fast?
- By : Daniel Carney
- In : Residential Investment Property,Residential Investment Property Market Updates
- Comments : 0
The growth we've seen in the Auckland real estate market in recent years has been nothing short of astonishing. Those who received sound property investment advice and purchased in Auckland even just 12 months ago will now be reaping the benefits.
The Real Estate Institute of New Zealand affirms that the median price in Auckland has catapulted $156,000 in the year to September 2015 – an increase of more than 25 per cent. Those gains alone could buy you a relatively new Aston Martin, a brand new fishing boat or around 80,000 cheeseburgers. Take your pick.
Figures from Trade Me add weight to this claim, as they show that the average asking price (not the median) has risen more than $300,000 in the five years to September 2015.
So, what is the main driver of this growth?
In case you need a quick recap, the market works on supply and demand, and if one exceeds the other then that can have serious implications on prices. For example, if there is more demand for property investment in Auckland than there is supply, the added competition will effectively drive up the price tags.
Recent research has revealed that this is exactly the case at the moment. According to a report from realestate.co.nz, there are now fewer homes available on the market nationwide since records began in 2007. This could potentially be longer.
However, this doesn't mean there are fewer people selling their homes. On the contrary, new listings are near an all-time high.
"The simple truth is that these properties are now spending less time in the market, suggesting that market pressures will remain high while the current rate of turnover continues," said CEO of realestate.co.nz Brendon Skipper.
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