An Update on the New Zealand Real Estate Market
According to one property expert the New Zealand market is about to “go bananas”, and represents a great opportunity for growth for New Zealand families. Spurred by foreign investment and strong local demand, property prices are primed to take off in 2016. It is now undoubtedly a perfect time to enter the lucrative property market all throughout New Zealand.
Throughout this article we will look at the different facets of the current market and inform you about some key indicators to look out for when considering property investment. By keeping up to date with the latest developments and market cycles, you will be better equipped with the tools necessary for investment success.
Property Market Segmentation
The first thing to consider when looking at property prices over the Country is that the market is segmented into smaller sub markets dictated by location. This means that what is happening in one city or region in New Zealand may not be representative of the entire Country. Different economic and social factors in different cities may influence the housing market in that city exclusively. For property investment to work there needs to be a balance of supply and demand, both for owner occupied and rental purchases. Your own research is important, not relying on Agents or Sellers!
2015’s Auckland Boom
2015 was another solid year for the real estate market, anchored by strong growth in house prices throughout Auckland. The City of Sails has been a bee hive of real estate activity over the last ten years with 60% growth in residential property values from 2007 to the end of 2015. This was emphasised by growth of over 20% in the 2014/15 financial year. This incredible performance helped New Zealand prices rises overall by over 11% in the same period. The huge gains in Auckland have spilled over to other North Island cities as evidenced by swooping gains in Hamilton and Tauranga with Whangarei beginning to move too.
2016 so Far
With a low cash rate of 2.25%, solid GDP growth and increased international interest, signs are good for New Zealand property markets in 2016. This has been evidenced by numbers from February indicating that the auction clearance rates are well up from the same period in 2015. In addition, median house prices have also risen compared to 2015, demonstrating an expanding housing market throughout the Country. However, growth has not been as strong everywhere with some areas only experiencing singly figure increases. After seeing explosive increases in house prices throughout 2015, Auckland and other surrounding cities seem to have cooled off in the New Year. This, however, is not necessarily an absolute negative and could in fact be beneficial in the long run if it has helped prevent a situation where prices are overvalued. Overall, it would seem that 2016 may be the year for South Island property investment to grow as experts expect recent gains to continue.
So start taking advantage of the property market get in contact with our friendly team for mortgage broking advice and services.
