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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Global ratings agency Standards & Poors is the latest to join the chorus of predictions around potential house price falls in New Zealand – and they’re picking a 10% drop.
Auckland ’s long-term future is sound as well situated residential developments will always sell and demand for affordable housing remains strong, a leading non-bank property financier says.
New mortgage borrowing rose by roughly $1.6 billion in May as the property market showed signs of recovery from the Covid-19 lockdown.