Auckland is a very desirable city and so it will continue to attract immigration, both internally and from overseas. As population growth is a key driver of the Property Cycle (as per the book “Grow Rich with the Property Cycle” by Kieran Trass). So population growth in Auckland will continue to put a floor under prices. Although the effect right now is dampened from people moving to Australia for sure, and there are new houses being built and people subdividing still.

I guess one of the things that’s helping it stay up is lower interest rates, but perhaps by the time they start raising them again it will be because inflation (and therefore house price rises) is running away again, so they are forced to raise rates. By which time, if people have deleveraged, then they won’t be entirely as bad off as if rates rose now.

So the best case scenario for home owners and property investors is rates staying low longer than they should. I still think that to get a genuine property boom again we are going to need affordibility to improve, as there is a limit to how much people can afford. So unless wages rise dramatically, house prices are constrained for the time being. So really we still need to get affordability (through wage inflation) to improve, and or deleveraging of the home-owner, for prices to be able to go up significantly.

A lot of people are heading to Oz but there is also a lot of migration and Auckland is the biggest benefactor of any migration. I think auckland is now getting up to the standards of some of those large overseas cities but with the advantage of it being still NZ and having all those quality of life benefits.

London will always be an expensive place to live, as will New York as will Sydney, Vancouver etc etc, this is what people are attracted to and will continue to be attracted to. Auckland is just becoming one of those large international cities that will continue to thrive and improve and keep attracting people. More people, more services required, more jobs and so it goes on.

If the prices are holding up as they are in the midst of world economic gloom then what will we see when Europe comes out of recession and the US gets going again. Fortunately as a food producing nation we will always have demand for our exports, which is why the Chinese are after all our farms, therefore securing their populations future food sources.

All these measures, do they take into account that its the norm now to have 2 incomes when in the 70′s every mum was a stay at home mum? If we now have 2 income earners in every family then people will continue to be able to afford bigger mortgages.

I reckon you are right re inflation though as in the last 7 years prices on a lot things have doubled whihc is say 15% inflation per year. Supermarket prices are through the roof, we get screwed on our own product as all the quality meats go overseas, and we pay the international prices for the left overs. That really annoys me. Like the UK i dont think we should have GST on food and drink. Tax something else instead.

I guess ome of the other NZ locations are propped up by the older richer NZ’ers moving into retirement and settling in quieter locations therefore creating demand elsewhere by moving out of Auckland??

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