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RBNZ to keep OCR at 2.5% amid housing dilemma
Auckland’s rampant house market is creating a nationwide group
of middle-class refugees – sick of the overheated prices and
willing to trade the big city for a better quality of life in the
regions.
Real estate agents around the country report an influx of
Aucklanders looking to trade out and up for less money.
Sophie Braggins, 30, was renting with her partner, Michael, in
central Auckland but buying into the housing market would mean
moving away from the city and probably into a much worse house.
They moved to New Plymouth three years ago and bought their
first home. “We’ve got family here but the property market is a big
factor. We’ve just bought our second home.”
Braggins became pregnant but was able to leave her job: “We
couldn’t service a mortgage with one income in Auckland,” she
said.
They have just bought their second home and, comparing it to
that of friends in Auckland, they are happy with their
decision.
A friend who just bought in Takapuna paid more than $800,000 for
“an absolute old dunger”, she said. Braggins’ new home cost
$700,000, has five bedrooms, two bathrooms, sea views and a decent
section.
Similarly, Sarah Chadwick and family moved to Cambridge in the
Waikato six weeks ago.
Her husband works in Hamilton and had been commuting from
Pukekohe. They left a 30-year-old, three-bedroom house in Pukekohe
for a “big, four-bedroom, two-and-a-half-year-old home” in
Cambridge for $80,000 more. “We were surprised at what we could
get,” she said.
Median house prices in Auckland are $565,000 and at least 17
suburbs have average prices of $1 million-plus.
‘More bang for your buck’
BNZ economist Tony Alexander said the Auckland boom was similar
to those in the 1990s which eventually spilled over to the rest of
the country.
“History tells us this will happen. First-home buyers will look
to buy outside Auckland.”
Centres where older people would look to retire – like Tauranga,
Nelson, Wellsford and Warkworth – would also be affected.
Takapuna man Warren Chapman was semi-retiring to Cambridge for a
larger section where grandchildren could play.
“You get more bang for your buck – you’ve still got the social
environment, the cafe lifestyle.
“In the real estate market, you get a much better value
proposition. If you want a $500,000 home in Cambridge, you get a
near-new one.”
In Auckland, Mr Alexander said the main problem remained a lack
of housing stock. As well, real estate agents reported that
Aucklanders were willing to leave the city but unwilling to sell
their original homes there.
Similarly, people were moving within Auckland but holding on to
their original houses. “People are buying their second homes but
they aren’t selling their first homes. They are keeping them as
investments.”
Mr Alexander said he had spoken to a real estate agent who
reported 93 people coming through an open home in Auckland, of whom
only three also had houses they wanted to sell.
“There is zero sign of Auckland cooling down,” he said.
Barfoot and Thompson managing director Peter Thompson said the
number of properties on the market “had shrunk to an all-time
low”.
June was the closest the company had come in 11 years to selling
as many houses as it had listed.
“In June we listed only 1189 properties, while our sales for the
month numbered 1059.
“At the end of June we had only 2873 properties on our books,
the first time our end of month listings have dipped below 3000
properties in the past 11 years.”
Barfoot and Thompson reported a stable average house price for
the city of $649,945, $5000 more than May’s average.