City Sales Look At What 2022 Holds for the Auckland Apartment Market

Having navigated a challenging and unpredictable 2021, City Sales is eyeing up the apartment market landscape for the upcoming year and is looking forward to making the most of the rather uncertain times ahead. 

So, what does 2022 hold for house prices, and in particular, for the Auckland apartment market? The relentless rise of house prices defined the market in 2021, but experts say the tide has turned and next year will be different. House price issues have multiple parts, with housing supply, affordability, interest rates, the lending environment and the rental market in the mix. And there are big questions around the outlook for all of them. 

Auction activity was reported to be cooling, with fewer attendees and bidders, and more auctions passing in. The expert consensus was that the market was past its peak, and price increases would level off. 

As City Sales’ Scott Dunn says, “The truth is nobody knows what is going to happen, but what we are keeping an eye on is that banks are making it tougher for buyers to take out loans”. CoreLogic chief property economist, Kelvin Davidson says the market is slowing and there are four key reasons why: affordability challenges, rising mortgage rates, a tighter lending environment and an increase in listings. “This makes for more buyer choice and means some vendors may have to meet the market”, he says. “In 2022 we may see a ‘buyer’s market’ for the first time in a few years.” 

Also, not only are rates on the rise, credit availability has got tougher. Loan-to-value ratios have returned, new Credit Contracts and Consumer Finance Act rules - which make accessing lending harder - are in place, and the Reserve Bank is consulting on debt-to-income ratios. 

Another factor that Dunn says they are taking into consideration is the threat of Omicron at the border. City Sales also had a slow December, which is usually busy, so there is potentially some pent up demand. 

“ We aren’t sure what will happen this year but my advice to anyone looking to sell or buy is to do it now as the apartment market is largely sentiment driven and I’m worried about what Omicron might bring”, Scott says. 

With this is mind please take a moment to find out more about selling apartments and studio apartments by visiting the website at http://www.citysales.co.nz .