What is driving house prices ?
1. Record House Prices- in May $454K
2. Historic Low Interest rates
3. Official Cash Rate (OCR)- Not expected to rise until next year
4. Mortgage Approvals – Bank approvals are up 13% on same time last year
5. Immigration neutral – Fewer Kiwis leaving for Australia
6. Building Consent – Increased strength in construction
7. Supply and Demand – imbalance continues to push prices up.
These are the building blocks that under pin the driving house prices we are experiencing.
“We are reaching the stage where people say, as they did strongly last cycle, that house prices will fall because gains do not match rent gains however the key determinant of rent levels in New Zealand is not always yield but what people can afford to pay. Most investors are looking to capital gain. Simply investors want someone to occupy the property, cover most of their running expenses and not damage it.”
(Tony Alexander BNZ Economist)
Filed under: REAL ESTATE | Tagged: Real Estate