many would say that this thread has been discussed extensivley however i have searched the forum and not found what i’m looking for.
my question is what is driving the Aukland market. Units in the Aukland are CF+. What is driving the rental prices up if the population has reached a plateau and maybe be on the decline. it doesn’t seem like a very safe place to invest- or have i got it completely wrong?
any insight or direction would be greatly appreciated.
bizibee
where did you get the idea that population is decreasing? my impression is that it is going UP.
javascript:insertsmilie(‘[wink2]’)
Wink [wink2]from my own research population growth has begun to slow. i have found it difficult finding info regarding who exactly is moving there?
Auckland’s population is more than 25% of the total population of NZ. It also has a large immigrant base probably because it’s the first port of call.
Both rents and house prices tend to fluctuate there more than most other parts of NZ. In Monday’s NZ Herald there was a report of rents falling sharply in many parts of Auckland eg Takapuna/Milford 23%, Sandringham 20%, Ponsonby, Herne Bay 13% and Remuera 11%. (allbeit the more affluent suburbs of Auckland)
The BNZ Economist, Tony Alexander quotes in his weekly overview, “With housing demand growth easing as population growth slows down while supply is rising at its fastest rate in 30 years there is an over-supply of rental accommodation appearing now which will eventually have implications not just for rents but for prices investors will be prepared to pay”
I would suggest being weary of investing in apartments/units in Auckland although I still believe there is a bargain in every market.
Cheers
JeffHi all
Jeff i think you’ve summed the whole thing up very well.
the Auckland market is not for the inexperienced (inexperienced about Auckland).
regards westan
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Greetings all. I think Auckland is the safest place in NZ to invest if you’re not familiar with the country. Biggest city in the country, we will be affected least by the slump we are moving into. Rents are only softening in the city and city fringes. I have many properties in South Auckland and rental demand is very strong there. Right now is a great time to be buying pos cashflow in Auckland. NOTE: Avoid apartments altogether at the moment and flats need to be VERY pos cashflow. Safest bet is 3 brm 2 bthrm or home and incomes. USe Realenz.co.nz to find home and incomes all over Auckland. MAny agenst list the yield on asking for you now and one email can get you rental assessments etc. on a property. AVOIND THE SMALL TOWNS AT THE MOMENT, THEY WILL BE HARDEST HIT IN THE COMING FLAT PERIOD!!
According to some statistics I found at http://property-group.massey.ac.nz/mureau.asp the Auckland city rents for Apartments have fallen from $362 in July03 to $327 in Jan05. Interesting.
Andrew
Re population, yes, Auckland has the big bell curve thing going on – most of the immigration to NZ comes to Auckland first.
HOWEVER!! the immigration rate is something that the NZ government in their infinite wisdom sort of open and close the gates at will, so to speak.
Now this is all a great big dynamic economics study. NZ dollar up, property prices up, immigration up, unemployment very low, demand, boom, etc etc.
Sounds good, right?
however here’s the flip side. Interest rates up. inflation up. property becoming un affordable. Less export possibilities (which NZ relies on) because the dollar is so strong, therefore less competitive for O’seas markets to buy our products.
So, what’s a government to do? They have put the brakes on immigration for the moment as far as I understand. This has nothing to do with how many people WANT to come and live in NZ, but how many the gov’t will let in this month.
NZ is constantly swamped by requests to immigrate there permanently, and (if anyone has tried, that is for example english, swedish, german etc) it’s extremely hard to ‘get in’. Aussies are different because we have a bit of a reciprocal agreement so no probs for Aussies to move to NZ.
Anyway, so yeah long term Auckland is SOOO predicted to grow. Right now they are having a government induced ‘situation’. Which is affecting the economy, the dollar, the property market (perhaps a little slower to react, because of course it’s mostly owner occupier driven, no matter what investors in their infinite egotism might like to believe.)
Sydney is no different, at the moment you have a glut of rental properties, you can bargain them down, all of that. However perhaps it’s a great time to buy because prices are a bit down. ???
Just really, Auckland is a lot like Sydney. It’ll grow and grow, and rents will be high or they will be soft. And then it will change…
cheers-
mini
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