Real estate agents forecast the property trends for 2014.
1. The impact of loan-to-value restrictions
There was no doubt LVRs had made first-home buyers postpone their plans, Marty Scott of Harcourts Wellington City said. But there was also evidence from Auckland that it had cooled price growth, and first homes were still attracting plenty of interest and multiple bidders. John Ross, owner of The Professionals in Lower Hutt, said the recent exemption from the LVR restriction for new build homes would lead to growth in that sector.
2. Apartment body corporate fees and earthquake strengthening
Add the potential cost of quake strengthening to the equation if you are thinking of buying an apartment, Euon Murrell, of Tommys Real Estate in Porirua said. "You've got to be aware of it and bite the bullet." Mr Scott said Wellington's apartment market was still strong, and complexes with high earthquake ratings remained very attractive.
3. Potential hot suburbs
Titahi Bay and Tawa were attractive for first-home buyers as lower prices meant they could afford a deposit with the LVR restrictions, Murrell thought. The same applied for parts of Lower Hutt. Upper Hutt could see a growth in new builds with the LVR exemption as there were plenty of opportunities to build there.
4. The impact of rising interest rates
The Reserve Bank indicated last month the official cash rate would likely rise to 4.75 per cent in the next two years. Mr Ross said the housing market had historically not been overly affected by interest rates. "The market rises and falls on confidence. Job security, employment prospects, a sense of an improving market are what helps or slows the market." Mr Scott felt an improving economy would compensate for interest rates and LVR restrictions.
5. Warrant of fitness for rental properties
Wellington City Council will pilot a warrant of fitness rating for rental properties, ensuring they are warm, dry and in good condition this year. Murrell said some landlords needed to do more to improve their properties, but it would not happen overnight. "Not all landlords have the money to do something."
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