Auckland: Buying right now
The last investment property I bought was a 3-bedroom townhouse with a garage in Auckland.
Don’t ask me what suburb because, honestly, I couldn’t tell you.
That sounds strange, but it reinforces my point.
The suburb wasn’t the important part: investing in Auckland was.
Right now cashflow isn’t my biggest priority. At this stage of my investing journey I’m trying to build as much long-term wealth as possible.
Auckland offers a better chance of achieving that over the next few years.
Why? Because Auckland property prices were absolutely pummelled in the last downturn.
Property prices fell around 24% from peak to trough. Developers flooded the market with new stock, which meant homeowners had to accept lower offers and buyers suddenly had more choice than they’d had in years.
Ironically, that’s exactly why I’m buying now.
The best investment opportunities often don’t appear when everyone feels confident. They appear when everyone else is nervous.
Auckland buyers are nervous right now ... so I’m buying.
Another reason is that Auckland looks very different today than it did five years ago. It’s also become harder and more expensive to build there.
Developers now face higher council fees, making projects more expensive. In some areas the wastewater capacity is limited, so new developments can’t go ahead until the infrastructure gets an upgrade.
That means fewer new homes may be built over the next few years.
Fewer homes built today usually means tighter housing supply tomorrow.
