Everything’s Going Up | Impression Real Estate
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Everything’s Going Up

Posted by Impression on 28, Oct 2021

Rents, values and interest rates: it’s all going up in the housing market as we approach the end of the year.

Rents have risen by 8% over the past year, with one- and two-bedroom properties rising faster than most. Wellington rents are currently a little higher than Auckland’s, influenced by flat rents during lockdown in the Super City.

Even with the lockdowns in place and measures to rein the housing market, values nationwide increased over winter to reach a national median of $795,000; up 15.4% on the same month last year according to REINZ data. The rate of growth is definitely slowing, with a dip in the median between August and September possibly an indicator that efforts to cool house prices increases are working.

But likely to be even more effective than all the Government’s regulations are the increasing interest rates. Surprisingly high inflation has led to predictions of rapid increases in home loan interest rates, which is likely to take a lot of the heat out of the housing market during 2022.

If you have a large amount of lending, you may find servicing costs take a big jump over the next few years. It’s a great idea to get ahead of these changes by talking to a financial advisor about how this might affect you. For instance, rising rents may help offset some of those costs, or you may be able to sell a property to reduce debt; a good advisor will be able to do some scenario planning to illustrate the potential outcomes. Remember that all Impression property management clients have a free hour each year with a financial advisor, so give us a call or email us if you’d like to set up a no-obligation meeting.

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