Brett Phibbs article published by the
New Zealand Herald forecasts how New Zealand property values increased at a
very low rate and this could be due to Christchurch's low valuations, interest
rates and high debt lending restrictions, which took a heavy weight on the
market.
Overall in New Zealand houses rose by
8.8% in March, which is the slowest gain since September of 8.4%. Residential
values rose by a small 0.1%, Christchurch's 1.5% decline affected this. The new Loan to value mortgage
lending restrictions imposed in October last year have seen prices increase
significantly in Auckland and Christchurch this "could lead to an asset
price bubble and cause financial instability" (Wheeler). Graeme Wheeler
started increasing interest rates last month to start inflation and is expected
to rise each month.
The Loan Value Restrictions imposed in
October and rising interest rates is said to level out the growth of property
values in Auckland and Christchurch from rising to extreme values, QV
spokeswoman Andrea Rush said that in some areas in the market we may see a
decrease this would be the first in two years.
Auckland values increased 0.9% and in
South Auckland decreased by 0.5%
Wellington house values rose by 2.8% and
in Christchurch up by 8.3%.
Main focus point featured in the
article: Property values are not rising to a fast enough percent and this could
be due to Christchurch’s low valuations included in the figures.
The article published relates to Welly
Real estate as it gives figures as to where property values are decreasing
which would have a run on effect for the business as less money made on the
house means less commission for the business and less profit for the seller.
Advise for Welly Real estate to not
focus their area base of house sales on one that has said to be of non optimum
investment and has alack of supply of houses for the demand. Stare clear of
Auckland and Christchurch as supply vs demand is decreasing and housing
shortage is a problem.
Works Cited:
Rush, A. "Property Values up 8.8pc".
Web. April
4.2014. http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11233729
Phipps, B. "Property Values up
8.8pc". Web. April 4.2014. http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11233729
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