The price of construction is astronomical right now – it’s gone up by at least 25% over the past few years and we’ve heard that in the past 12 months it’s shot up again. The squeeze is making it increasingly difficult for developers to build new apartments and houses. There’s just no margin in it.
Late last year there was only a year’s worth of apartments being built and the housing shortage may have dropped out of the news recently but that doesn’t mean it’s been fixed.
What does this mean for the prospective investor? First, it means there are deals to be done – both off the plan and for existing stock. Second, it means we’re staring down the barrel of a housing shortage that’s not going to ease up any time soon. Third, we’re hearing anecdotally that some older investors are selling up before the Healthy Homes Guarantee Bill comes into force and interest rates go up. If that happens, there will be plenty of choice for savvy buyers and the prices will be right.
Auckland is a buyers’ market right now, so make your money work hard for you. There are fewer auctions, so you can negotiate harder than ever, take your time to do your due diligence and even put in a finance clause. It hasn’t been a buyers’ market in Auckland since about 2012, so if you have the means to buy in 2018, this could be one of those years where our clients make their biggest financial strides.