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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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.