As we approach the mid-year point of 2015, official figures show that house prices in Auckland rose by almost five per cent on the previous quarter alone.
In fact, the average price of a house in Auckland is now well over $800,000.
An interesting report indicates that increasing numbers of people are now buying property on a shared basis with others. While that has always been something that was known in terms of friends and family, what is unusual about this is that many of the co-buyers are unknown to each other initially.
To all intents and purposes, this is effectively a form of buying syndicate with the multiple owners sharing all of the costs, sometimes including relocation costs, associated with purchasing and maintaining the property.
Now of course, for companies involved in furniture removals, Auckland (and elsewhere) having a bustling and energetic property market is good news. People are moving properties more frequently and that means a high demand for our services. We’re not complaining about that!
However, we can’t help wondering whether or not the current position with house prices across the country, at least in the major cities, isn’t in some danger of ballooning out of control. Based upon past experience both domestically and overseas, increases of nearly 5% per quarter tend to suggest that a property market bubble has developed and they have a bad habit of bursting – unless some form of corrective action is taken to get things under control.
Buying a property with other people may be a practical way of getting on to the property ladder though it might run the risk of simply adding further fuel to the fire of house price inflation.
If you are considering a joint purchase of this nature, it’s also important that you get in-depth legal advice in advance about the pros, cons and risks. Don’t arrange things with your co-buyers exclusively on a verbal basis – it’s a recipe for dispute and chaos downstream.