What’s Up With Oz House Prices And What Does It Mean For NZ?
Sydney has had a decline of 9.5% in property prices since they peaked in July last year. John Bolton of Squirrel Mortgages says that technically anything more than 5% is considered a crash. So should that worry us in NZ?
At present nobody in Australia seems to be worried, the decline at present appears to be an orderly unwind. House prices in Australia have doubled in a decade, the same as what has happened in Auckland. So overall there is plenty of equity in the property not to create systemic risk for lenders. The caveat is that falling house prices don’t take the broader economy into a consumer-led recession, so far confidence is holding up.
In Auckland, the composition of the housing stock is still very different from Sydney. In Auckland that is still typically houses whereas in Sydney it’s apartments. In Sydney, there is an oversupply of apartments. Here in NZ, we have not been building apartments anywhere near the same speed as they have been in Sydney.
Auckland house prices are down 0.50% in the last quarter, that’s not a crash, it’s merely a soft market.
We have 10 Open Homes this coming weekend, click the link below for the Open Home times and to discover what’s on offer.