Boom times as economy outstrips all predictions
Monday 6 September 2004
The economy has outstripped all predictions with its longest growth spurt since the 1960s. But the growing pains have the Reserve Bank worried, as James Weir reports.
By The LandlordA clear sign of an economy on a roll is the growing number of construction cranes. Wellington, like many other places, has plenty of building projects, together worth hundreds of millions of dollars, and a swag of big apartment blocks on the go or on the drawing boards.
They reflect confidence that the economy will keep growing strongly, with plenty of workers and apartment buyers to fill the new space.
CAS Group director Craig Stewart says in just three weeks the developer sold 22 high-priced apartments in Portal, a planned development near the waterfront. The prices range from $600,000 to $850,000 - steep for Wellington.
"There is still a good strong steady demand for quality projects," Mr Stewart says.
Another CAS project, the $36 million 108-apartment Montreaux on The Terrace, is still months away from completion in May, but is almost fully sold – mostly to owner-occupiers rather than investors or speculators.
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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.