As we gear up for a new year (and a new decade!), it’s safe to say that 2019 has been an interesting year for the property market.
Take the ban on foreign buyers, for example. According to Real Estate Institute chief executive Bindi Norwell, the ban has affected sales volumes but not prices, with the national median price increasing by 5.6 per cent in the 11 months to November 2019.
Increased demand and a lack of supply led to strong price growth (including some all-time records) in the regions, whereas in Auckland, the median sale price was 0.6 per cent down year-on-year. But there have been signs of an uplift recently and housing confidence is improving. Some economists, like ASB’s, are revising their house price forecasts for the new year, saying low interest rates may prompt more house price growth through next year than had been expected.
“Mortgage rates fell steadily through to around November this year, and our rule of thumb is that it takes about six months for mortgage rate changes to feed through to house prices,” said ASB economist Mike Jones. “The effect so far has been large. Debt servicing costs have fallen back to the low levels of the prior decade, despite the average household debt burden increasing steadily over the past few years.”
With certain key elements likely to remain unchanged (like high population growth, low interest rates, and shortage of housing), ASB expects property prices to increase by 6.5 per cent nationally.
At this stage, of course, only time will tell. But in the meantime, our Team at Mortgage Link wishes you a restful holiday break filled with great food, lasting memories and moments to relax… We’ll return in the New Year with more news and updates.
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