Auckland Property Market Update

The Auckland Property Market -Latest Update

Recent reports on Home Loan Affordability indicate that the Auckland housing un-affordability is at record high which has serious implication for first home buyers.

The report from Interest.co.nz highlights that a typical first home buying couple earning median wage currently needs to set aside more than half their after-tax income to meet the mortgage payments on a lower quartile home.

Mortgage payments are generally considered “affordable” when they take up a maximum 40% of take home pay.

However, at recent price levels, mortgage payments on a lower quartile-priced home in Auckland would be sitting at around 50%.

This jumps as high as 70% if interest rates were to rise to 7.5%.

The net equity position of new homebuyers if often high risk as well. First home buyers often start out borrowing from family or securing their property against their parents to help out with financing.

According to Real Estate reports, April 2017 experienced a big drop in both the volume of homes sold and in median and average prices – with prices tumbling an average of $50,000.

Cooling sales figures were also reported some real estate agencies with the lowest sales figures since the Global Financial Crisis in 2008.

Auckland appears to be in a wait and see mode right now with a cooling in demand and an increase in the number of properties sitting on the market indicates that potential buyers are taking their time and exploring all of their options.

Subdivisions Opportunties

Despite a cooling market, strong rental demand and shortage of new housing could provide an opportunity for landbankers to subdivide and on-sell redevelopment projects.

Much of this month’s increase in Auckland relates to multi-unit consents such as apartments and townhouses, potentially reflecting increased activity from developers now that the new Unitary Plan has cleared its legal hurdles.

Navigating the maze of lenders and loan options can be daunting for anyone in the market for a mortgage. Whether it’s your first home, you’re upgrading, refinancing or adding to your investment portfolio – it pays to have the right team of expertise to back you up and mitigate your risks.

Having the right mortgage broker

A good mortgage broker can take away the hassles of dealing with the bank and its myriad of paperwork requirements. Their proximity and relationship with banks can also often sharper interest rates which could potentially save your tens of thousands during the tenure of the loan.

Speed of transaction and turnaround times are often a significant advantage that serious investors have over others.

Choosing the right conveyacing specialist

An experienced conveyancer will guide you through the legal processes required to transfer the ownership of real estate from one person or entity to another.

Conveyancers involvement in property transactions:

  • Prepare, clarify and lodge legal documents – e.g. contract of sale, memorandum of transfer
  • Research the property and its certificate of title – check for easements, type of title and any 
other information that needs addressing
  • Organise Lim Reports on request.
  • Hold the deposit portion of the purchase price in a trust during the interim.
  • Calculate disbursements for rates and taxes
  • Co-ordinate settlement with the bank or financial institution and notify parties when final payment has been released.
  • Address any inconsistencies identified during this process by notifying parties, managing expectations and outcomes.

Parshotam Lawyers have been assisting clients for over 20 year with conveyancing requirements in Auckland. We also specialise in subdivisions and refinancing residential and commercial properties. Talk to our team today and find out we can help with your property purchase and investment requirements.

Disclaimer: Information contained is not intended as investment advise.

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