Buying a slice of Aotearoa becoming a dream
Thursday 5 August 2004
Investors urged not to get caught out by rising interest rate rises and falling immigration as house prices show no sign of easing
By The LandlordIt is harder to buy a house in New Zealand at the moment than at any other time and one expert is warning investors to take care.
AMP's latest Home Affordability Index shows that in the past four months, the median house price has surged seven percent to a new high of $248,000. In Auckland the rise is more than 11 percent.
AMP Savings and Investment Manager Roger Perry says rising interest rates and two years of steady price rises are taking their toll and scraping together a deposit is an even greater priority for a growing number of young couples.
Mr Perry says that while there is still a great deal of confidence in the housing market, there is some anecdotal evidence the property boom has reached its peak. He believes there is still some time before the bubble bursts, but says investors need to keep a close watch on the market as interest rates rise while immigration falls.
Mr Perry says eventually supply will always catch up with demand and house prices will fall.
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There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Vacancy rates in the commercial property sector are set to increase as changing economic conditions dampen demand.
LVR restrictions were never meant to be a permanent feature of New Zealand’s housing market and ANZ economists argue that some further relaxing of them could soon be on the cards.