New Zealand properties – leading to a bubble?

Real Estate in New Zealand may be heading towards a bubble and prices are already in some areas like Auckland is beyond the roof and some even calling it out of control.

• For example, a run-down home in Auckland, without electric supply, without water supply and floorboards threatening to fall in fetched more than a million Dollar in auction.

Latest figure by Real Estate Institute of New Zealand (REINZ) shows, there are reasons to worry -

• 8,174 dwellings sold throughout New Zealand in September 2015, up 38.3% on September 2014 and up 5.3% on August 2015.
  
  
• A new national record median price of $484,650, up $64,650 (+15.4%) on September 2014 and up 4.2% on August 2015.
  
  
• The national median price, excluding Auckland, up $28,000 (+8.3%) to a new record of $365,000 compared with September 2014 and up 4.7% on August 2015.
  
  
• A rise of $156,000 (+25.4%) for Auckland's median price, from September 2014 to September 2015 and a $31,000 (+4.2%) rise compared with August 2015.
  
  
• 143% rise in the number of sales over $1 million between September 2014 and September 2015 - from 428 to 1,042.
  
  
• Record number of auction sales at 2,311, with sales by auction reaching more than 50% of total sales in Auckland for the first time.

Reserve bank of New Zealand is likely to venture into options to curb skyrocketing prices.

Foreign buyers making a greater impact on prices, especially from China. New Zealand properties are fifth most searched properties in China, followed after US, Australia, UK and Canada.

Next RBNZ policy meet remains crucial to see how much impact this price rise in real estate going to have over decisions.