Property Remains An Attractive Safe Haven
By Derryn Mayne – Owner of Century 21 New Zealand
The medium to long-term impacts of the global Covid-19 outbreak remain unclear. We’re being told to brace for a significant economic shock, the global share market has been in freefall, and we’re hearing a lot about social distancing and self-isolation.
However, at the same time demand for housing in New Zealand has been strong, sales volumes and prices have been up, interest rates have never been lower, with rents everywhere from Westport to Wellington at all-time highs.
With so much volatility on the financial markets, property remains a safe haven to put your money. Whether you’re a first-home buyer sick of paying rent or a retiree who’s barely getting a return from their savings in the bank, buying residential or commercial property has never looked more attractive as a long-term prospect.
Even if there are a couple of quarters of negative growth – which is technically an economic recession - the overall future of property in New Zealand remains strong. It always has been.
2020 was looking like the best year for Auckland real estate we’d seen in the past three or four years. In fact, parts of the market and parts of the country may still do relatively well.
Kiwis are conservative by nature and are looking for a safe bet to invest their life’s work. The Global Financial Crisis (GFC) of over a decade ago, makes many wary of some bright and shiny finance schemes promising a top return. However, at the same time, the financial service sector is now much more tightly controlled thanks to legislation passed after the GFC which adds protections and considerable transparency for investors.
While commercial property continues to do well in many parts of New Zealand, property syndications are now proving popular with many Kiwis. They generally require a lower investment and offer a solid and steady return without the headache of being a landlord and all the stress and ongoing costs that come with that.
However, nothing beats 100% ownership and control. That has never gone out of fashion, and in fact looks more appealing by the day. Kiwis know that even if they have to be a little more patient, property will deliver strong capital gain.
Our franchisees are seeing first-home buyers taking their opportunities, while many existing homeowners view the record-low interest rates as the perfect time to invest in a bigger or better property.
Following the Reserve Bank’s major cut of the official cash rate, which it has committed to for at least 12 months, open homes will get busier for some of our salespeople. Rest assured Century 21 remains vigilant with the public, with good policies and protocols in place to mitigate any spread of Covid-19. We’ll continue to stay absolutely attuned to the Ministry of Health’s ongoing guidance for our industry
I remain optimistic that there’s another good summer ahead of us. Business and consumer confidence will quickly return. We will be through our General Election, and the American presidential race, with Auckland geared up to host the 2021 America’s Cup and the high-profile APEC Leaders’ Meeting.
Regionally, some great major infrastructure projects are coming on stream – the latest being the 15km Huntly bypass, then there will be the Hamilton one, and the nearly billion-dollar motorway extension from Puhoi to Warkworth in the next couple of years. These kinds of projects will help to open up Waikato, North Auckland, and Northland for business and investment, and aren’t bad for local real estate either.
Don’t let anyone talk down the New Zealand property market. It has endured depression, world wars, recessions, and various economic and health crises, and it will outperform anything thrown at it this year too.
To read the latest March edition of C21NZ Market Pulse, click here: https://issuu.com/century21australasia/docs/c21_market_pulse_nz_march_2020
Derryn Mayne is the owner of Century 21 New Zealand.