Could National's return to power usher in a construction boom? And the region investors should watch most closely is…
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With New Zealand's 2023 general election over, a glimmer of hope seems to have emerged in the country's property market. Property reports from several authoritative local organisations suggest that the market's slump, which has lasted a year and a half, is nearing its end. Experts agree that clear signs of a recovery are appearing.
QV's latest report, released last week, showed signs of recovery in New Zealand's residential property market, with values generally stable to rising. In the third quarter, the national average house price rose 0.9% from the previous quarter to NZ$899,256.
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National's victory is widely expected to lead directly to house price rises over the next year or two. The bright-line test period is highly likely to be shortened. Mortgage interest deductibility for property investors will also be phased in, whether properties are new or existing, regardless of their type or age, while restrictions on overseas buyers may gradually be eased. National may also intend to slow housing intensification in major cities, which would have a positive long-term effect on house prices throughout New Zealand.
That raises a question: with the market entering a recovery, where in New Zealand offers the greatest potential for property investment?
New Zealand regions ranked by capital returns
The latest Capital Gains and Rental Yields Report from the Real Estate Institute of New Zealand (REINZ) shows strong returns on residential property investment on the South Island's West Coast, which ranked highest for both capital gains and rental yields. Surprisingly, among the 16 regions surveyed nationwide, the North Island's Wellington and Auckland ranked lowest for investment returns, placing 13 and last respectively. Many South Island regions, including the West Coast, Southland and Canterbury, were near the top of the rankings.
Given this, how can investors from the North Island, or even overseas, successfully enter these high-return South Island markets?
Here is your opportunity! Following the successful Auckland event for the New Zealand International Building Expo & Summit (NZIBES), the Christchurch event will arrive in the South Island city on 3 November.
Figures show that this year's NZIBES Auckland event, held over two days on 11–12 August, achieved several more milestones in the expo's history:
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The Auckland event's renewed success in August provided an efficient networking platform for construction professionals. Many businesses raised their profile at the North Island event while also gaining a clearer understanding of market trends.
Construction professionals need to build broader partnerships and marketing channels. Last year, NZIBES came to the South Island for the first time as a summit, giving construction professionals from across the country an opportunity to exchange knowledge and resources.
This year, guided by the principle of “Connecting north and south, building success together”, the South Island expo will once again provide a platform for industry professionals from both islands to establish business connections and develop partnerships. The dinner on the evening of 3 November is also expected to welcome more than 300 professionals from the North and South Islands, including investors, developers, building material suppliers and other specialists.
Compared with the North Island event, the biggest highlight of this South Island event is the connection and exchange between the two islands. Many industry professionals with years of experience in the South Island market will be invited to share their experiences of developing there, helping their North Island counterparts understand the market. It will also offer South Island professionals interested in exploring the North Island market an opportunity for in-depth discussion.
Most importantly, with New Zealand undergoing a change of government after the election and a post-pandemic economic recovery, the South Island market holds enormous potential for development. Join the South Island event and seize new opportunities!
