14/02/2023
An extract about the market from an email advising a friend about their Whangarei properties
“As to timing . If they were my houses I’d wait out this down period. I think it will last for all of 2023, followed by a severe hangover in 2024. By then new build costs will have increased with inflation and existing homes will go through a catch up period. This means the best return for your properties will be from 2025 onwards. 20-24 months away. Meanwhile there remains a shortage of rental properties so the pressure on rents will be upwards rather than down, so you will get a good return meantime.
Something I have recently realised as I’ve tried to complete work around home is, the current wet Summer will have drastically slowed all building programmes. For example concrete can only be poured when it isn’t raining. Site works require clear weather for the machinery. Building sites have to be electrically safe for the workers. Building construction will be way behind schedule and getting further behind with each wet day. This means there is no immediate chance of the building programme meeting current needs in the foreseeable future. More pressure building for existing stock.
As a marker, I’d follow the interest rates. When mortgages are below 5./. the housing market will move again.”
