House prices set to drop, says analyst
Page 1 of 3 5:00AM Sunday May 27, 2007
By Miles Erwin
The property market's big boom is finally about to end, with a top investor analyst predicting price drops in Auckland within the year.
Kieran Trass, of Suburbwatch.co.nz, said his data forecasted a drop in three main indicator suburbs in Auckland - Manurewa, Forrest Hill and the northern bays of the North Shore.
"I would be surprised if in 12 months we don't see a decline in values in the North Shore and in other parts of Auckland. I haven't been as confident of a drop-off in Auckland in the past six years," Trass said.
"It's almost like the setting sun. It has not gone yet but it's obvious it's not going to be around much longer. You are not seeing blood on the streets and you are not going to, but it's certainly time for caution."
Even blue chip areas, such as Mission Bay and Kohimarama in central Auckland, are showing signs of a drop in growth. "East Coast Bays - even top-notch areas like St Heliers - the trends in those suburbs look like the growth is tailing off," he said. "Wellington, meanwhile, still looks great but Christchurch is looking very patchy."
Trass analyses data from Land Transfer Authority sales and he said several Auckland suburbs had had a dramatic decline in price growth.
With an expected sales downturn in winter, the suburbs could see price drops in the next six months.
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