Soaring Property Prices

Posted by lindsay on October 28, 2013

Once again house prices are on the rise in New Zealand. According to an article published in the Herald on 15 February, the national average is up 9.6% from last year. In major centres, buyers can be expected to pay a median price of between $380,000 and $550,000. The reason for this, 5076636_m.jpgaccording to one ASB Economist, is an imbalance between supply and demand: there's a high number of buyers, and a low number of listings. For this reason many sellers have chosen to go to auction with their listing; in fact, one out of every five houses in Auckland is now sold this way.
This news doesn't bode well for property investors. Not only will they being paying a high price for property, but they'll often have to engage in a bidding war to secure any home of interest. Further, the return on investment will likely be minimal at best. Investors stand to make a mere 1-2% ROI in New Zealand, compared to property investment overseas, where they could generate a profit of up to 15% annually. Add to this the availability of houses, at a fraction of the price, and the choice becomes clear: America truly is a land of opportunity.