Auckland market catching its breath: Trass
"Some people think we’ve reached a plateau now and that the market’s going to drop. My perception is that it’s just a breath-catching moment." A similar pause occurred in March or April this year as potential buyers adjusted to the rise in house prices.
"I think it will stay a little subdued until Christmas, but come the new year, I expect it will take off again," he says.
This final phase is likely to last a few months and prices will be driven up to unsustainable levels."
Trass doesn’t buy the theory that the boom is partly being driven by baby boomers buying rental property to provide retirement income. Exactly the same thing had been said in 1996 when the market was last this hot.
"If that’s the case, why weren’t more people doing that in 2000?"
Trass believes the Auckland market will hold true to previous patterns once the boom is over and that nominal house prices are unlikely to go down – he notes that Auckland prices actually fell in 2000, but that was the only year they did in a seven year cycle. However, not all sellers will achieve the median house price – those who can’t afford to wait are likely to fare worse than others.
