Yes, there will be another New Zealand property crash, and, yes, it will include Auckland. In May 2015, I made a video outlining the reasons why the Auckland property market was in a bubble and so would eventually crash. Rents versus income were unsustainable. Mortgage servicing costs versus income were unsustainable. Housing affordability factors have only got worse since. Auckland has even moved from fifth to fourth in the world’s least affordable cities for housing league table.
We are now at the "all the experts agree" stage that there will be a crash at some point. In the last 2 months, prices in Auckland have finally shown sign of pulling back. I'm not noticing examples of commentary saying "it's different this time" and that prices will continue to rise, as we’ve had in other cycles.
So, will it be a settling down? A pull back? Or a catastrophic crash? The factors suggesting a soft landing, particularly in Auckland, are net migration driving demand, and the ongoing issues around supply - releasing land for housing and shortages of skilled workers in the building industry in particular. Factors suggesting a more painful experience are the extreme un-affordability currently and the fact that interest rates are finally starting to rise which will create some real difficulties for people once they flow through to the weekly budgets of householders.
The real biggie to keep an eye on though will be events overseas. New Zealand still relies on overseas capital to a very large extent. We are also very intertwined with the world economy. We have a very open economy and an export dependent economy. If there is another economic crisis overseas - think US debt crisis, the EURO zone getting into serious difficulties, or China's housing bubble crashing - then we could find our banks having to raise interest rates even if the Reserve Bank is keeping its rate low as access to overseas capital becomes more difficult. Then, the Mum and Dad owner-occupier workers and the negatively geared investors relying on low interest rates to be able to service their mortgages would find life very difficult and it could trigger a major melt down.