Post Election Market
The election result is now known and the status quo remains with pre election nervousness disappearing. This should inject some confidence back into the housing market as things such as a capital gains tax are not likely to come to fruition for the time being, and those that were waiting to see what happened can now move forward.
There was a pre election lull in relation to new home consents and market commentators are expecting activity to pick up before the end of the year. Strong demand for homes in Auckland and Canterbury are expected to drive demand for the building sector in the next couple of years. It is interesting to note a rise in consents for new apartments. These consents have risen form 4% in 2010 to now make up 12% of total consents. This figure is buoyed by growth in the retirement village sector.
The Reserve Bank made no change to the Official Cash Rate in September, with the next review due 31 October. This provides ongoing stability to the market, and we have seen the continuation of some good fixed interest mortgage interest rates especially for one and two years.
There is some relaxation from the banks in relation to lending criteria creating more interest from first home buyers and increased confidence generally.
A softening of the New Zealand dollar may also provide stimulation to the market as residential property becomes more affordable to those returning home from overseas or migrating to New Zealand.
All in all, with the election behind us and some positive signals from the lenders, and hopefully some good weather as well, we see the market picking up over the spring and summer.