Most economists are predicting the housing market has peaked but Auckland property investment adviser Kieran Trass reckons the boom hasn’t started yet.
While the number of days it takes to sell a house in Auckland has halved, the number of sales has shot up and prices have risen, they’re up only about 10% on a year ago, Trass says.
"I can’t see a boom in the trend … a boom doesn’t just happen overnight. A boom builds momentum. My personal opinion is that we will have a bigger increase in the next 12 months," he says.
The Auckland market is nowhere near the state it got to in 1994. "It was frantic. It was impossible to buy a property."
The economists are being taken in by seasonal factors, the traditional winter slowdown in the housing market, he says.
Trass and his firm, Hybrid Property Consulting, is preparing to launch a board game which is designed to be an educational tool for residential property investors. "It’s not a game of monopoly." He says it will allow would-be investors to practice building a property portfolio without the risk of paying out real money.
A key tool for those playing the game will be Trass’ Hybrid Read Estate Cycle Clock which aims to show where exactly in the cycle the housing market is.
Developing the clock involved studying the last three cycles in New Zealand, and Auckland in particular, and takes into account more than 40 indicators. Currently, these include strong net migration, low unemployment and relatively low interest rates.
Even current weak business confidence should bolster the housing market, Trass says. While business owners aren’t feeling confident enough to invest in their own operations, they are investing in houses, he says.
One indicator he takes particular notice of is the "flatmates wanted" columns of the newspaper. At the moment it’s near impossible to find places to rent in Auckland and the rent per room is going up faster than overall house rentals, he says.
Even the current global economic concerns and the sabre-rattling in the Middle East shouldn’t hurt our housing market, Trass says. The market actually benefited from the last two major crises, the Asian crisis and the September 11 terrorist attacks, he says.
