Property · Building · Design
New Zealand house prices have fallen about 5% since the end of 2021, with declines exceeding 10% in some areas. Although some economists believe further substantial falls are not inevitable, homeowners who bought at the peak in 2021 will be feeling some pressure in the current downturn and should start considering how to avoid the risk of negative equity.
Well-known independent New Zealand economist Tony Alexander recently released the results of his monthly survey of mortgage advisers, conducted with mortgages.co.nz. It found that investors were showing greater interest in buying property, a sign not seen for some time. Coincidentally, his latest monthly survey of real estate agents with REINZ also showed signs of renewed investor activity. The proportion of respondents reporting investor interest in cheaper investment properties rose from 34% at the start of this year to 45% now, the highest level in almost two years.
A recent media survey of construction companies found that enquiries about building new homes had fallen by 70% to 80% amid property market concerns over rising mortgage rates and falling house prices. This has sparked fears that New Zealand's property market could revisit the severe downturn of 2009/2010.
With the OCR and fixed mortgage rates continuing to rise, recent articles on YIJU's official WeChat account have featured interviews with financial professionals to help borrowers find effective ways to manage and reduce high interest costs. A reader recently asked us: as fixed mortgage rates rise and required repayments increase, should borrowers increase their repayments as much as possible before their fixed-rate agreements roll over to higher rates, to reduce excessive mortgage interest costs?
Immigration New Zealand has just announced its latest immigration policy, introducing a new investor immigration programme, Active Investor Plus. The current investor immigration programme will officially close on 27 this month, next Wednesday, and Active Investor Plus will launch on 19 September.
New Zealand property data company OneRoof recently reported that far more companies would be liquidated in construction this year than in other industries. Although exact figures for failed builders have yet to be released, insolvency industry body Ritanz says construction accounted for 25% of company liquidations from January to May this year, more than double the 12% recorded by food and accommodation services, the industry with the next-highest rate. Figures provided to the media by New Zealand's Ministry of Business, Innovation and Employment (MBIE) show that 120 companies registered with the Companies Office under construction industry codes were liquidated in the first half of this year. For the corresponding period in the previous three years (1 to June), the figures were 128 in 2021, and in 2020
Stats NZ released its latest quarterly consumers price index this morning. In the second quarter, ending in June, New Zealand's inflation rate reached 7.3%, its highest level since 1990. That is not the only recent bad news. As widely expected, the Reserve Bank raised the official cash rate (OCR) again last week by 0.5%, taking it to 2.5%. Although this is the highest official cash rate in nearly six years, inflation remains so high that forecasters expect another 0.5% increase on 17 August, followed by further increases of 0.25% each in October and November. This would bring the OCR to at least 3.5% by the end of this year.
Figures released by Stats NZ on 1 July show that 51015 new homes were consented in the year ending in month 5 of 2022, up 17% on the corresponding period in 2021 and setting another record. Consents for multi-unit homes rose 36% compared with the corresponding period in 2021.
Ride a vintage steam train, explore on horseback, watch equestrian events, pick up fresh fruit and vegetables at weekend markets, admire water gardens and enjoy the beauty of west coast beaches. All these uniquely New Zealand ways to slow down can be found in Pukekohe.
The Reserve Bank of New Zealand today again raised its official cash rate (OCR) sharply, by 50 basis points to 2.5%. This is its third consecutive increase of 50 basis points this year. The Reserve Bank said the increase was intended to “continue tightening monetary policy at pace to maintain price stability and support maximum sustainable employment”.
The Reserve Bank said the aim was to “continue tightening monetary policy at pace to maintain price stability and support maximum sustainable employment”
The Reserve Bank said the aim was to “continue tightening monetary policy at pace to maintain price stability and support maximum sustainable employment”