The International Monetary Fund (IMF) has stated that the
booming housing market is probably one of New Zealand’s greatest economy risks (Sabin) .
According to IMF, New Zealand’s economy is one of the
fastest growing and the housing market is surging, especially in Auckland with
price rising 14% over the last year (Sabin) .
Auckland’s largest real estate group, Barfoot & Thompson
confirmed that March sales were slightly up on that of last year but the median
price was up $32000 to a total of $652000 (Hargreaves) .
The problem is that people start expecting the price to keep
rising and jump in to the market in fear of being priced out later, which puts
even more upward pressure on the market (Sabin) .
However this can be good news for Welly Real Estate. I would
advise that they look at getting sales in Auckland for the meantime while sales
are rising. Especially because this trend is likely to continue for the next
year at least according to Sabin’s article and the fact that national consumer
confidence is at a 9 year high and is expected to increase over the next few
years thus making it even more likely for people to jump into the housing
market (Herald) .
I advise also for Welly Real Estate to watch the Reserve
Bank as interest rates are expected to continue to rise in a hope of stopping
the market surge. Also be wary of the new mortgage restrictions of increasing
the LVR as this will effect the market negatively.
Works Cited
Hargreaves, D.
(n.d.). Barfoot & Thompson reports March sales slightly down on year
ago figures; median price surges $32k to $652k; market still distorted by
fewer low-end sale. Retrieved from Intrest.co.nz:
http://www.interest.co.nz/property/69289/barfoot-thompson-reports-march-sales-slightly-down-year-ago-figures-median-price-surg
Herald, N. (n.d.). Consumer Confidence At 9 Year High.
Retrieved from NZ Herald:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11220950
Sabin, B. (n.d.). Auckland Housing Market A Problem For
NZ - IMF. Retrieved from 3 News:
http://www.3news.co.nz/Auckland-housing-market-a-problem-for-NZ---IMF/tabid/421/articleID/338162/Default.aspx
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