Corelogic have just released their February Property Sales figures. The speed of increase is going up with Whangarei now showing a 14.6% year on year rise . This is well in line with predictions that we will hit around 20% growth this year . However the rate of growth has slowed down this month to a 0.7% increase from a 1% increase last month. This probably reflects the apparent slow down in the Auckland market where prices appear to have stagnated for the last two months together with the holiday period. Despite this slow down all the signs are for more pressure on property prices not less. Low interest rates are going to be with us for several more years. Houses are not being built as fast as demand dictates. In other words we have a housing shortage that is getting worse not better. Our population is getting bigger faster through natural growth, emigration and people not leaving the country. Building materials and costs are going up daily so the cost of building is increasing fast .
Every indicator that I look at says the rise in house prices is far from over and that Auckland has another round of rises coming. A bit like the calm before the storm or better still Auckland is passing through the eye of the hurricane . And while Auckland tends to be the focus of attention the provinces , like ours , will get big capital gain rises over the next two years as we close some of the gap that happened when Auckland prices bolted away.
The average house price is now just under $392,000 . That’s a $6,000 rise on last month so properties are increasing on average at $1,400 per week. This is really important to remember if you are negotiating to buy a property. An average sale would take 6 weeks to settle from the time it was first signed up. That means the property will have gone up in value by $8,400 from the time you signed up to the time you pay for it. The message is clear , be prepared to pay more for it to secure it. If you miss the property you are chasing not only will have some costs but the next property you chase will be that much dearer. Its not the time to quibble over a few thousand dollars of price. It is the time to get your foot on the property now. It will be worth what you made in a matter of weeks . Remember ” you never pay too much but sometimes you buy it too early”