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2021 has got off to a rollicking start. House prices in Whangarei have been going up by an average of $1, 230 per week for the last year. So the question is “ Will this continue or are there some pressures building to change this. I think so!!
Interest rates
Let look at the historical reason for the current rises.·

 

Low interest rates. its cheap to borrow money and you get a better return from houses than from the bank.· Supply and demand. There is still a chronic shortage of housing. The supply issue in partly being addressed. Higher property prices mean marginal subdivisions are profitable again. Building permits are steadily increasing across the country, so we are finally beginning to close the gap between supply and demand, but we have a long way to go and it will be 10 years before we actually catch up.· Returning Kiwis are buying up properties. Many of these are in the county where they were born, so the provinces are doing well.· Qualified KiwiSaver buyers are in the market in ever increasing quantities.· Building costs are going up fast. In 2016 the average cost to build in NZ was $1906 per m2, with many variances depending on size, quality, and location. In 2020 that had risen to $2238 and will be higher today. ( Canstar.co.nz) We are now nearly twice the cost to build the same house than our Australian cousins who are paying around $1,190 per M2. (Michael Yardney Property Update ) . Get your kids to get a trade if they are looking to be wealthy in NZ

One thought on “

  1. Couldn’t agree more the only way for the govt to go so as not to break their tax promise is amend the bright line time line. I have been noting this in my discussions over the last 12 months, and it will be no less than a 100% increase and probably more and will hit the headlines very soon.
    I agree that my childrens children are going to have a hard time in getting into housing, UNLESS alternative ways of approaching the matter are implemented. These will include variations of rent to buy ie one possibility is ownership of the house with the crown leasing the land over a long term at a fixed low % of the site value and with a right of purchase of the site at lease end at fair market value. Another option islong term lease of residential property with rental increase safeguards and with tenant assignment rights but where the landlord or crown own the basic structure, and the land ,but the tenant provides and owns the full internal fitout and maintains the same and interior décor. This will help to maintain overall standards and encourage landlord investment. We must also get serious about prepack housing, it works!!!!
    Just a few thoughts
    John Hudson

    Liked by 1 person

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