The housing market kept climbing right through autumn, but there are now clear signs that growth is easing off and investors are taking a breather.
Bank economists and the RBNZ are warning that house prices could fall, although BNZ points out that, “Even if prices fell 20 percent, it would only take them back to where they were a year ago. For new buyers, this would be problematic but for prospective new entrants a boon. For the majority [everyone else], it shouldn't really matter.”
Rents continue to rise, although more slowly in Auckland than in other regions. Central Auckland is one of only two areas where rents are the same as they were a year ago. In addition, we expect rents nationwide to stay relatively flat over winter as tenants hunker down during the colder months. If nationwide rents continue to rise or start to increase rapidly in spring, it’s likely the Government will consider introducing some legislation to control this, such as rent caps.
With strong rents and significant capital gains, established property investors have seen the benefits over the past year. It will be tough to balance up those benefits against the new regulatory challenges as they come into effect. Talk to our property managers if you want to get a sense of how your property’s rent might change over the next few months.