Housing shortages in AKLD & Chch will support house prices
Housing shortages in Auckland and Christchurch will support house prices in New Zealand
August 11, 2011 – The New Zealand housing market has performed above expectations according to the QBE LMI New Zealand Residential Property Outlook released today. Notwithstanding the current uncertainty in global markets, prices could grow by up to 6% per cent nationally over the coming year.
The report, exclusively prepared by Infometrics for leading mortgage insurer QBE Lenders’ Mortage Insurance (QBE LMI), showed that low interest rates have helped keep house prices stable, with median house prices climbing 1.1% to $356,000 over the last twelve months.
The introduction of tax changes by the Government has adversely impacted investor demand for property over the last twelve months, particularly at the lower end of the market. However, the report does predict that this influence will subside as house prices improve in 2012.
The report also highlights that a shortage of new housing will support an increase in New Zealand house prices up to 12% over the next three years. Auckland is predicted to lead the nations’ housing market recovery, with June 2014 prices forecast to reach up to $541,200, or up to 16% higher than June 2011 prices. CEO of QBE LMI, Ian Graham, said: “Auckland has been at the forefront of the improvement in the housing market since October last year. A better than expected economic performance, low mortgage rates and lower building activity continue to underpin prices in this market.”
Following the Christchurch earthquakes the New Zealand economy grew 0.8% in the March 2011 quarter. In comparison, the Australian economy shrank 1.2% during the March 2011 quarter impacted by the Queensland floods. Building activity is forecast to continue to rise across the country as a result of an improving housing market and a predicted recovery in the economy. The Christchurch rebuild will drive a significant increase in residential building activity, in 2012 and beyond.
QBE LMI has been providing lenders’ mortgage insurance to the finance industry in New Zealand for over 22 years. Our long-standing vision is to create home ownership opportunities for New Zealand families through the customers we support in this country. The recent appointment of Neil Millar as Senior Manager, based in Auckland, supported by our service orientated underwriting team led by Diane Richard, Portfolio Manager New Zealand, reflects our long term commitment to the New Zealand market.