Property News : Is now the time to buy a Property

 Extract from Crockers Market Research ISSUE 46, May 2009 of the

That’s certainly the view of many commentators – and it seems buyers agree. Weak sales at the start of the year gave way to booming sales in March. REINZ reports that sales are particularly strong at the lower end of the market, and BNZ economist Tony Alexander suggests that ‘holding off’ is no longer the best strategy for prospective house buyers.

 In his BNZ Weekly Overview of 26th March, he says:  With a fundamental shortage of houses in New Zealand, construction plummeting, yet net inward migration possibly at the start of a boom, holding off buying in the hope of either lower prices or a wider range of choice seems risky. The risk reward trade-off no longer argues in favour of the optimal strategy last year which was hold off. If I were a buyer I would be inclined to purchase now. After all, even the unemployed need somewhere to live, plus even migrants with places offshore they cannot sell also will need somewhere to live. Both factors bespeak of support continuing at the lower end of the rental market in particular.

 He also talks about the correlation between migration and house prices:The two graphs to the right help explain why we are not pessimistic about house prices. (see link below for graphs)  The first shows a clear correlation – with squiggles along the way – between annual net migration flows and dwelling turnover. It supports our view that real estate turnover has bottomed out. This second graph shows the correlation – an even better one – between net annual migration flows and house price inflation.

Based on his prediction that population growth is likely to be between 15,000-30,000 over the next year, it seems reasonable to expect the housing market to strengthen further still. Given that most migrants and returning New Zealanders settle in the greater Auckland region, this region should benefit the most.

See for more detail.

 This article was shared with you by the conveyancing team at Auckland property law firm | Quay Law.  To contact our lawyers.