Property And Mortgage Market
The property market in New Zealand is still growing at a reasonable if not high rate. Home values across New Zealand have generally recouped any losses they suffered between 2008 and 2010 in the last four years. The availability of housing across New Zealand has increased by 13,500 units per year and the sales of new and existing homes are up between 16 percent and 33 percent over 2014 rates depending on the part of New Zealand you live in or buy in.The mortgage market had been getting slightly tighter as government intervention that is planned to prevent inflation and another slump in housing growth and price increase had caused interest rates to grow slightly. Banks, both foreign and domestic, are taking the perspective that houses are a better and safer investment than apartment buildings.Government has made some moves to make foreign investment and ownership of real estate more difficult. This is particularly true of funds coming from China but the recent devaluation of the yuan is likely to make this move redundant.One of the major drivers of the housing increase is immigration. Immigration to New Zealand is higher than it has ever been in history. Jobs, the climate, and the beauty of the country are seen as the most dominant factors in immigration.Most immigrants may not be planning to be permanent residents of New Zealand. When their jobs play out they plan to go back to their country of origin. This situation makes apartment occupation ideal for immigrants. The average immigrant cannot afford most homes in New Zealand.Economic growth and a glut of jobs in 2015 are one of the major reasons people see New Zealand as a perfect place for a new beginning. While most immigrants are not financially fixed to purchase a home at present prices, the government’s action to make apartment dwellings less attractive to investors appears to have been a misstep.The mortgage market is still a mainstay of the economy of New Zealand with 88.2 percent of the gross domestic product of New Zealand tied up in the mortgage markets.Inflationary pressures associated with increased prices for all goods and services are a concern for banks and governments. A majority of recent government and bank decisions about money in New Zealand are designed to curb inflation. Inflation is still seen as the major cause of decrease in the value of housing almost a decade ago.All indicators and analysts predict a continuing growth in the real estate market in New Zealand through the remainder of 2015 and into 2016. Many people that own homes will probably see their home’s value increase significantly. Mortgage money is expected to get a little tighter in 2105 and 2016. New apartment building is expected to decrease as a result of government concern over inflation.