Auckland’s apartment market is benefitting from the classic demand exceeding supply scenario. It is a structural problem of population increasing at a faster rate than dwelling supply coming on line.
Adding fuel to the fire is the 50-year low interest rates and the lower purchase prices relative to residential houses.
Simply adding more houses or freeing up more space to build is not as easy as it sounds. In fact boosting supply through densification or increasing the suitable allocation of land supply are issues that may not be rectified in the Auckland Unitary Plan.
Because of this apartment values are likely to keep appreciating despite central government and Reserve Bank controls cramping capital value growth.
This year we expect to see a continuation of apartment prices reaching new highs. Developers will continue to pursue new opportunities or re-work existing plans. Despite growing cautiousness, banks will lend to proven developers and purchasers will continue to buy off the plans.
Source : Colliers International