Well, the die has been cast, and as it stands, land and housing value in Auckland will stumble in the foreseeable future, despite the bliss right now, according to the industry’s insiders.
Particularly in those regions outside Auckland. And, while the expected slump is less likely to happen in 2016 perhaps because of the rising prices, the risk will inevitably come true in December of 2017 and beyond.
What’s going on right now is, the demand for better houses is driving the prices up, but after a while, the fall will be triggered by the little done to help build more homes.
Infometrics chief forecaster Gareth Kiernan knows that despite the stability exhibited right now, the oversupply of property vis-à-vis the slow population growth will trigger the situation. Aside from the forecaster’s sentiments, Milford Asset Management’s executive director, Brian Gaynor, adds that the fall will massively affect the country’s economy. New Zealand is currently reeling from the adverse effects of high levels of debt, according to Gaynor, and the path to recovery will utterly be dealt a blow.
Westpac acting chief economist Michael Gordon. Red Source Here
Lots of building firms are coy, perhaps finding it hard to make money because of the projected fall in house and land prices. The current building costs are pretty high, and the future looks bleak. Moreover, the many ads for skilled construction workers means that with high demand is an expected higher wage demands.
While the rise continues, new zoning of those areas where the prices have been rising has been created by the Auckland Unitary Plan. With bank landing policies tightened, property developers are struggling to finance their projects. On top of that Auckland Council don’t have the resources to cope with current number of recourse and building applications Land value in the “super city” are likely to fall.
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