Is it time to get out of Auckland?
Auckland has been the go-to place for everyone from first home buyers to investors. Young kiwis and families are seeking out the local schools and job opportunities, while investors have been chasing the strong value growth that our most populous city boasts. After all, where else in New Zealand does QV report 16.5 per cent year-on-year value gains on properties nearing a $1 million average?
It's this huge demand from all and sundry that has been pushing up and maintaining Auckland house prices, as well as adding fuel to the debate of whether we are doing enough for housing supply. As 2016 rolls ever onward, the local and national governments are feeling more and more pressure to sort things out and create affordability for those trying to make the most of their first home loan.
It's a win-win situation for anyone buying in Hamilton at the moment.
However, despite seeing a blip of moderation in recent months, Auckland prices quickly recovered and continued to rise. However, it appears there is something of a sea change coming over the market. Data from Barfoot and Thompson, the largest real estate agency in Auckland, showed that April sales figures haven't been this low for the last four years. Perhaps people are starting to head elsewhere.
But where would they be heading? QV National Spokesperson Andrea Rush makes the case that places like Hamilton are seeing a halo effect from the rising values in Auckland. Both locals and property investors from the City of Sails are attempting to sink their capital into Hamilton, while first home buyers are likely attracted by the low buy-in relative to Auckland.
It's a win-win situation for anyone buying in Hamilton at the moment. They see stronger growth (25.3 per cent year-on-year gains) than Auckland, at a lower purchase point. It's accessible to everyone, and could be a main driver for the recent rise in housing finance that the Reserve Bank of New Zealand has reported in the last few months.
The question that Auckland buyers should be asking themselves is whether or not this southern migration will affect the local property market. With population still continuing to outpace housing supply, it's unlikely that Auckland will be seeing a crash anytime soon. However, Hamilton does present an excellent opportunity, and one that might not last as demand continues to pick up.
If you want to jump on this value-growing train before a correction, it's best to speak to the team at Squirrel Mortgages. Whether you are after a first home loan or your next source of capital gains, we can help you invest in this new property hotspot.