Unprecedented sales activity in March has seen Auckland’s residential housing market establish new records for prices and sales numbers. The average house price is even more expensive than in Sydney, with the gap widening as a stronger Kiwi dollar heads towards parity. The Australian Business Insider reports–
Barfoot & Thompson, the largest agent in the nation’s largest city, is flat out like a lizard drinking, selling a record 420 homes for more than $1 million in March, an increase of around 40% on 12 months ago, and a quarter of all sales.
I wonder how much of this ends up in the election coffers of a certain party that favours mass immigration?
The company says its median price for property is up 9% on March 2014 at NZ$711,000 (AU$698,000). By comparison, the median price in Sydney is $8000 less at AU$690,000, a jump of 13.9% year-on-year.
MD Peter Thompson said prices were up 3.9% on the previous month and the average sale price is at an all-time high of $776,729, up $17,000 on the previous record set in December.
“In the first quarter of this year, the average sales price has risen 6.1 percent over 2014’s average price for the year of $716,588, and March’s average price was 7 percent higher than it was 12 months’ previously,” he said.
“There is every reason to anticipate prices will continue to rise,” he said, but refused to be drawn on how much higher. Westpac NZ predicts price rises will beat the national average with 7.5% growth.
Why would anyone put any money anywhere other than into the Auckland housing market?
This kind of activity drives GDP up and allows Bill English to say “look, our debt to GDP ratio is falling”, when in fact its all just a smoke and mirrors farce. Who is going to take responsibility for the disaster when this all ends up in the shambles it inevitably will?
Reserve Bank governor Graeme Wheeler said he following in February about the outlook for the Kiwi economy.
“Our concern about house price inflation is based on the risk it poses to financial stability and the broader economy. Although it has not been a major factor in recent years, high rates of house price inflation can spill over into stronger spending and pressure on consumer price inflation.
“And the more that house prices get out of line with historic relativities, the greater the risk of a sharp correction, leading to financial instability.”
Nobody is listening Mr. Wheeler. Least of all John Key and Bill English.