New Zealand Property Market Report

Transcription

1 New Zealand Property Market Report August 20

2 Introduction What is the purpose of this report? This report is aimed at equipping you with the best and most up to date information to make sure you make the right choice when navigating the complex and daunting property market. What's going on in the property market? The Auckland property market, and to a lesser extent the wider New Zealand property market, has experienced a period of strong growth. This has been driven by a number of key factors that have combined to create a perfect storm: Interest rates are at historically low rates, making access to home loans more affordable High migration from New Zealanders returning home and overseas migrants attracted by New Zealand's relative safety Low level of supply, which has been driven by a lack new of building activity High confidence in the market attracting a lot of speculation and investment from New Zealanders and from abroad The impact of all of these elements has been double digit growth in house prices in Auckland of +46% to a median house price of $771k since Even the rest of New Zealand has seen a growth rate of +18% to record a median price of $365k in the same time period. What is the impact on home buyers? This rapid rise in property prices has outstripped real wage growth in the wider Auckland area and has stretched the income to house price ratio to unprecedented levels. This in turn has made large parts of the property market inaccessible to people looking to buy their first home or moving up the ladder. Therefore it is even more important for first home buyers to ensure that they are purchasing homes which are sustainably affordable and in areas which are less prone to price corrections. Data Insight has analysed property data from across New Zealand and in this report have identified affordable areas that offer good returns at the entry level of home ownership.

3 Home Buyer Market Report Demand in New Zealand 31% 28% 12% 7% <$200k <$400k <$600k <$800k <$1.0m <$1.5m $1.5m+ Demand for properties valued under $400K is outstripping volume. As a first home buyer in this area, you may pay more than you had intended due to demand Sale Price Growth Median Sale Price Growth Year on Year 24% While Median Sale Price growth has been positive, we are seeing a trend down in this growth, particularly Auckland 13% 3% 9% Nationwide Auckland Sales Growth Home Loan Registration Type - Volume Change YoY Jul Aug 39% Sep Oct Nov Dec Jan 1% -12% Feb Mar Apr May Jun Negative growth in Investor Home loan registrations indicates that first home buyers and investors are no longer competing like they once were First Home Buyer Investor

4 Demand by Region Demand in Auckland Auckland Demand for properties valued under $600K is outstripping volume. As a first home buyer in this area, you may pay more than you had intended due to demand Demand in Wellington Wellington Demand for properties valued under $400k in Wellington is in-line with demand, suggesting that this is good region for First Home Buyers to consider Demand in Christchurch Christchurch Christchurch has an excess of supply under $600k, making it attractive to First Home Buyers

5 Auckland Focus Million Dollar Club Auckland prices are rising with more and more suburbs joining the million dollar club, meaning that it is harder to buy a first home in Auckland

6 Auckland Focus Current Suburb Hot Spots Top Suburbs by Sales Price Growth Jun- vs. Jun- Some Auckland suburbs are growing at a faster rate and represent a better investment for first home buyers Hauraki Golflands Hobsonville Papakura Opaheke Otara Westmere Sandringham Royal Oak Otahuhu 35% 35% 34% 33% 32% 31% 40% Up and Coming Suburbs The next suburbs that could represent a good investment are suburbs where the average sale price for a 3 bedroom house is less than $1m and have seen slower growth, but near booming suburbs

7 Contact HSBC for a detailed Property Report Data Insight has prepared this report (the Report ) on behalf of The Hongkong and Shanghai Banking Corporation Limited, incorporated in the Hong Kong SAR, acting through its New Zealand branch ( HSBC ) for general information and discussion purposes only. It does not contain any views, opinions or recommendations about any financial products or services. This Report does not constitute advice on property, tax, legal, accounting or other matters for which you must seek and rely on the advice of your own professional advisers. Data Insight has based this Report on information obtained from sources it believes to be reliable, but which it has not independently verified. HSBC makes no guarantee, representation or warranty and accepts no responsibility or liability for the contents of this Report and/or as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Report. No part of this Document may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC. The Hongkong and Shanghai Banking Corporation Limited 20. ALL RIGHTS RESERVED