Overseas buyers a factor in driving up house prices
Monday 25 October 2004
Some homes in New Zealand are now part of the global property market - and overseas buyers willing to pay more are driving up prices.
By The LandlordProperty prices have risen about 50 per cent in the past three years, which some economists argue is justified by strong economic growth, lower unemployment and rising wages.
But part of the increase may be overdone and the market set for a fall, other economists warn.
A Massey University senior lecturer in real estate, Graham Crews, says it is "hard to predict any sort of property crash", because of the strong economy, low unemployment and strong export prices.
Overseas buyers had been pushing up property prices in some areas - even for "bread and butter" homes.
"Migrants have been a major driver in prices, where New Zealanders have just stood back, aghast."
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Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.
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Mortgage lending fell to its lowest level on record last month as the property market ground to a halt during the Covid-19 lockdown.