For your benefit, I am quoting some facts from the REINZ Auckland Region Analysis for July 2015.
Within the Auckland Region house prices fell in July 2015 only in Auckland City by 9.8% and North Shore City by 0.2% compared to June 2015. Within the region prices did not fall in Waitakere, Manukau, Rodney and Outer Auckland.
This implies that we cannot generalize and say that the whole regions is witnessing a fall in prices.
Another point to note is that sales volumes have increased. Even in Auckland City, sales volume increased in July 2015 by 15.2% compared to June 2015. For the whole of Auckland Region, this figure was 12.5%.
Based on volumes, we cannot argue that the market is going down.
Third is the velocity - the number of days to sell was steady from June to July at 29 days. Compare this to the past 10 year average being 34 days.
Now to summarize with a quote from REINZ Chief Executive, Colleen Milne, "… Investors are very active ahead of the new LVR restrictions coming in October and the long standing inventory problems are only worsening."
I think we need to wait before we can comment whether the bubble is bursting or is it shifts in demand - region to region, type of property, reshuffling of portfolios due to the new 70% LVR rule (for home loans to residential investors) and so on. The long term solution probably lies in balancing the market demand and supply.
Note & Disclaimer: The views expressed in this article are of the author and in no way reflect the views of Global Financial Services Ltd., the organisation, or its employees. This article should not be used as a source of any financial or property advice by the readers.