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Auckland House Prices Jump By $709 A Day

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Contributor:
Brian Dalley
Brian Dalley
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As reported in the New Zealand Herald Saturday Apr 17, 2010 house sales are booming nationally and Auckland leads the way with a $709 a day jump.

Auckland last month had the biggest price rises and the most deals.

As I have reported on a number of occasions, I think it is deplorable creating headlines to gain readership rather than help guide with reliable information so people can make better decisions. Statics are the same, it just takes a little more time to understand and report them in the true context.

For starters it’s little wonder Auckland (the proposed super city) leads with the most deals, however as for having the biggest price increases I thought that prize would have been awarded to Mt Maunganui after Colin Giltrap purchased a ninth floor penthouse apartment for a reported $5.5 million, a record price for a home in the Bay of Plenty. That surely would have fudged the average sale price in that area.

Glenda Whitehead of QV Valuations said;

“While the year-on-year statistics continue to look very positive for the Auckland region, a closer look at recent months indicates values in many areas have hit a plateau. Discussion with our valuers supports this flat-lining theory, but scratching deeper into the local markets reveals that the various suburbs and price brackets are acting differently”. view additional commentary here

The national median price jumped $10,500 from $350,000 to $360,500, a $338 a day rise. Wow! One might say, property investors must be making a fortune I hope the IRD come down on them like a ton of bricks.

I can assure you property investors are doing better than OK but they are not making anywhere near $338 to $709 a day.

Will the Reserve Bank increase interest rates to dampen speculation, only time will tell, but with headlines such as Auckland house prices jump by $709 a day I guess they would be justified in doing so.

I hope that the Reserve Bank will look at the other side of the coin. The number of people who received mortgages in the first quarter of this year was 30 percent down on 2009.

I guess the biggest concern for the Reserve Bank would be the rate war that is about to erupt between the banks now that HSBC have reduced their floating rate to 4.99% and on top of that, some banks have loosened their lending criteria.

Maybe a .25% increase in the wholesale rate later this month could be on the cards before things get out of hand.

Either way, if you are buying, selling or investing, do your homework, do not be lead by people that generalise, sensationalise and have a blatant disregard to reporting the facts in a balanced manner. Read between the lines.

Each area has its own demographics and statistics, which can be dramatically different between neighbouring suburbs. I am not advocating it is the right or wrong time to buy, sell, or invest, as that would be generalising, all I am saying is do your homework.

Brian Dalley is a leading Property Consultant | former NZMBA Mortgage Broker, and Real Estate Agent.   You can read more of his views and opinions on his website www.propertyprofit.co.nz.  

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