Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Forget Treasury, House Prices Will Rise, Not Fall, Despite Recession

The head of Century 21 New Zealand is joining a growing number of economists, property experts and commentators saying Treasury has got it wrong in its forecast on house prices in the Pre-election Economic and Fiscal Update (PREFU) even with the country now in recession.

“Back in March, the experts were miles off with their dire winter and spring real estate predictions, and they’re set to get this coming summer wrong as well,” says Derryn Mayne, Owner of Century 21 New Zealand.

Treasury now predicts the average cost of a home will fall 5% by June next year, before rebounding as economic confidence recovers and immigration picks up. However, major bank Westpac is among those that have reforecast house prices. It now predicts a 6.3% increase in house prices this year, followed by an 8% lift in 2021.

According to REINZ’s latest statistics, annual nationwide median house prices are up 16.4%. In Auckland they’re up 16.0% on the same time last year, with our largest city also up 3.5% on the previous month.

“There are simply more factors in real estate’s favour, than are against. Unemployment is set to be less than initially forecast, interest rates are expected to stay at record low levels if not going lower, the removal of LVRs makes it easier for people to get into the housing market, demand remains strong while supply is short, and rents are holding up,” she says.

Ms Mayne says with banks offering very low returns on term deposits, the real estate market is again seeing the ‘mum and dad’ property investors who can spy solid rental returns and know residential property is always a safe bet for capital gain in the medium to long term. Returning expats and Kiwis living overseas are now also actively investing in New Zealand property.

“There’s a lot of talk that the economic fall-out from Covid-19 will see New Zealand become a starker country of ‘haves’ and ‘have nots’. Getting into the property market sooner rather than later, and making the most of the very low borrowing costs, is one of the best things young Kiwis can do to ensure they’re participants in New Zealand’s economic recovery, not bystanders,” she says.

The Century 21 leader says with the median weekly rent in the Auckland region steady on $560, borrowing say $600,000 would prove cheaper to service for many renters, with increasing numbers waking up to that opportunity. However, she notes borrowers’ ability to service such debt will be closely scrutinised by banks.

“With LVRs gone, meaning the end of 20% deposits, young Kiwis in secure employment are doing their sums. If they can cobble together a more achievable deposit, many can see their mortgage repayments would be less than their rental commitments, plus they’re helping to secure their futures,” says Derryn Mayne.

www.century21.co.nz

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>

ALSO:

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO: