April 12, 2016
2016 Market Prediction Continued – Have we reached the peak ? Is this 2007/08 all over again?
March 2016 saw the highest levels of sales since March 2007. Based on that as a key indicator and other factors our 2016 Real Estate Market Pedictions still stay the same in that:
1/ The market will head into a correction cycle – but not yet as Mortgage Interest Rates will continue to stay low for some time – perhaps rest of the year until they move upwards
2/ If you look at the CLOCK above we are sitting at 10/11 – so not far until we see a correction
3/ We expect Mortgagee Sales to start kicking in late 2017/ early 2018- as interest rates rise and those that borrowed at 4% can no longer sustain the pain of increased rates
The KEY factor is Mortgage Interest Rates – once they start rising rather than falling as they have been – that is when we will see the shift to the 12 o’clock position on the Property Cycle Clock.
REINZ March figures released today show…
• 9,527 dwellings sold in New Zealand in March 2016, up 30.7% on February and up 8.2% on March 2015. This is the highest number of sales in March since 2007.
• On a seasonally adjusted basis the number of dwellings sold rose by 5.5% compared to February • National median price of $495,000, up $20,000 (+4.2%) on March 2015 and up 10.0% on February
• New record national median prices across New Zealand, New Zealand excluding Auckland, Auckland, Waikato/Bay of Plenty, Wellington, Nelson/Marlborough, Canterbury/Westland and Central Otago Lakes
• A 27% rise in the number of sales over $1 million between March 2016 and March 2015 – from 1,023 to 1,301 • 20,180 dwellings sold by auction in the 12 months to March 2016, representing 22.0% of all sales, an increase of 38% in the number sold by auction in the 12 months to March 2015
• Excluding the impact of the Auckland region, the national median price rose $35,000 to $385,000 compared to March 2015.
As always – One person’s opinion!