Auckland Predictions

[MadMax]

Heres a post where people can put their predictions on the future Auckland market and in years to come we can see who is the most correct. Very interested to see what people think

Heres my stab in the dark

Start of Slump 2017
Start of Recovery 2022
Start of Boom 2023

[MadMax]

Dont be scared to give it a go!

[Damap]

There is too much uncertainty to predict anything is the problem Max. It will take a decade or more to catch up on Auckland building shortage so unless we see global recessionary issues it is likely Auckland will keep going for years. The more far sighted soothsayers are saying ew are entering uncharted waters. As unlikely as it sounds we could see a decade of more of further growth.

[chrisgoh]

Slump? Not hopeful

[MadMax]

Slump? Not hopeful

Boom for ever you reckon?

[chrisgoh]

Boom for ever you reckon?

Boom forever? Not hopeful either

[PC]

"This time it's different!"

[Kbkiwi]

I predict slow growth over the next 10 years, averaging around 3-5% a year over the decade.

house supply will eventually increase to meet demand, and most new houses built will be sold at a lower price than the current average Auckland sale price.

[RonHoyFong]

1. Rule of 72. If the current average interest rates continue staying low without any large increases above 7.5%pa then property values will not double over the next 10 years by 2025.

I predict a slump starting to happen either late 2017 or 2018 in outer suburbs of Auckland in particular the new housing subdivisions but Central Suburbs of Auckland will keep increasing in values because of housing shortages. The current build of new houses is not matching the current growth in immigration of which half are stopping off to live in Auckland.

The Chinese... because of the NZ & China's "Free Trade Agreement" will feed the Auckland Property Market as well as New Zealand trade exports.
Shortages in property will continue whilst our larger developers continue spending all there energy and resources rebuilding the commercial areas of Christchurch.

[PTWhatAGreatForum]

Meanwhile, in the rest of New Zealand...

I think I will stay in our well proportioned home on a goodly chunk of land. It's enough to put a rental, or 2, on and still have room to play. Who knows? We have enough land here to join the landlordary club (the dark side)

[webhostienz]

I think people will soon find that you simply cannot build "affordable houses in auckland". The going rate for a town house seems to be about 750k at a minimum for a new build.

Even though there is a shortage of housing, the affordability of a 750k home for a FHB is low. Hence we will see lower investment in new homes when large developers with the likes of hobsonville, murphys road etc will find that they cannot sell their houses for 750k +

This will lead to a shortage of dwellings and will lead to weekly rents increasing quite rapidly.

This shortage will keep prices at their current level or rise only with inflation 3-4% PA until rents rise to levels where people will think that 700-800k is possibly a good deal again. I suspect this will be around 2020-2022. Causing prices to rise again possibly leading to a mini boom bringing the auckland mediaon to 1m there you go... just thinking out loud.

[Tom]

[QUOTE=RonHoyFong;384033]1. Rule of 72. If the current average interest rates continue staying low without any large increases above 7.5%pa then property values will not double over the next 10 years by 2025.

Hi Ron,

My understanding of the rule of 72 is it calculates the amount of time it takes for an investment to double in value by dividing the percentage rate of growth by 72 (I.e 10% per annum growth ((72/10)) = 7.2 years to double). Unless I've been using this wrong?
If this is correct can you please explain your reasoning with the above statement? It seems to imply that the capital growth rate is linked comparatively and proportionately to the average interest rates?

Can you please explain?

Thanks a lot

Tom