New Zealand Property Investment – Is the Market Looking Up?

Conflicting reports this week on New Zealand's property market. From the Australian:

A total of 5228 homes were sold last month, the most since February last year, according to a report from the Auckland-based Real Estate Institute of New Zealand. Sales rose from a record low 3706 in January.

Sounds quite an impressive rebound right? Interest rates are at an all-time low, might be the time to jump into property investment in New Zealand? Don't get too excited, as with any report from the Real Estate Institute of New Zealand (the Real Estate Agent's professional body) read between the lines and take a whole large heaped tablespoon of salt!

The more sober report in the NZ Herald correctly points out that January is usually the low-point of summer for property sales! Lets face it nothing happens in New Zealand for the first 10 days of the month - most of the agents are on holiday, the property magazines aren't published and we all go to the beach. There are several regional long weekends towards the end of the month to, when we all go the beach. In fact, if you find an agent working those first few days of the year it can be a good time to strike a deal, except remember your solicitor is probably on holiday to!

Anyway according to the NZ Herald:

"We place little weight on this month's recovery. The trend in house sales remains flat despite some monthly volatility with housing demand yet to make a convincing recovery. While large declines in the mortgage rate have prevented housing demand falling further, the level of house sales remains weak. Potential house-hunters are either waiting for house prices to fall further or feeling cautious due to economic uncertainties. Higher deposit requirements are another hurdle for first home buyers,"

At the unemployment rate is expected to go to 8% this year, so potential buyers maybe will feel a little insecure about signing up for a first or larger mortgage anytime soon.

Although there was a slight recovery in the national median property price to $330,000 days to sale were up to 62 days. In fact that is almost certainly an under-estimate because most real estate agency contracts are for only 30 days, and which time the owner will often change agencies, normally blaming the agent rather than their own unrealistic price expectations (see sometimes I am on the agent's side! )

Wellington's Famous Wooden Houses, New Zealand

Photo credit: New Zealand Property Investment