Property investors confidence may grow in NZ in 2010

| August 14, 2010 | 0 Comments

After the recession and liquidity crunch of 2007, the housing markets all around the world received a huge blow. However, after a recent survey in June, 2010, by the Connells Survey & Valuation, it is found that the percentage of real estate property investors has increased by 12% on an annual basis.

The valuation of property firms has risen by 20% compared to 2009. In the second half of 2010, the volume was up by 13%. However, the volume for first time home buyers rose by 1% in June, 2010, compared to the previous year. So, experts are suggesting that either the first time home buyers are choosing to stay put or wanting to remain frozen out of the housing market, as lenders are demanding for high deposits.

Housing scenario in NZ in 2010

As per a report by Quotable Value New Zealand Ltd, the government valuation agency, property prices rose by 12%, so far the largest increase since a 12.4% gain in May 2006.

New Zealand house prices rose at the quickest pace in 13 months in June, which indicates that the Central Bank will maintain interest rates at a record high this year.

As house prices are increasing, the homeowners have gained confidence to borrow and spend more, as per the report. The cash rate was increased last month to 8%, which was a big record.

According to a survey and report by Shelter Offshore, Christchurch property prices are generally cheaper and have slowed from the top rate in the beginning of 2000. However, they are now increasing steadily as demand for property in Christchurch remains steady. Mostly home buyers are heading for this city, due to its location and closeness to beaches and vineyards.

Auckland, which is a wealthy city, has experienced a 12% rise in property prices over the past 2 years. This is because of the rapid economic growth of the city. According to Shelter Offshore, the rise in property prices may continue for the short term.

Housing market is also improving in the capital, Wellington. The city attracts mostly the workers across and beyond the country, as there are lot of business and commercial activities. So, property investment is very much popular in this city and the confidence of investors is on the high all the time.

The confidence of New Zealand investors improved to -11% from -25% in the past three months. According to a report by ASB, 18% of the polled people said that rental properties give the best return, where the percentage was 15% three months back.

The NZX 50 Index has risen by 16% from its low in early March, 2010. The investors are eagerly waiting for the results in second-quarter earnings, which will start to flow from August, 2010. All are expecting better results in the housing market.

Category: Business & Finance News

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