Time to buy property in New Zealand ?- Experts Call the Bottom

The useful thing with watching a small market its not hard to know who knows their stuff and who don’t. For many years Tony Alexander, BNZ’s Chief Economist has been accurately calling the New Zealand property market.

A few weeks ago I wrote that New Zealand houses were close to affordable and now the experts are calling 2009 as the year that its time to look at buying in the New Zealand market. According to the NZ Herald:

“As long as I figured on keeping my job I would be out there actively looking for a property at the moment,” Mr Alexander said.

“I wouldn’t be hanging off simply trying to pick the low point in the house-price cycle.”

Oddly enough, from an international perspective, New Zealand is looking reasonably sound and likely to ride out the economic crises. The drop in the New Zealand dollar has made agricultural exports far more competitive – and although China may have stopped buying iron ore and coal from neighbors Australia they still need to eat, and food is what New Zealand is good at producing. !

For the last few years admitedly house prices have been high, but given the favorable tax climate for housing in the country: no sales tax on property and no capital gain for most investors, it seems that houses are going to be out of favor for long.  Remember to that overseas investors can buy practically any property in New Zealand, and with US$1 buying NZ$2 – its a fantastic time to be moving money into the local currency.

Oriental Parade, Wellington, New Zealand

The experts suggest that investors and home owners alike start looking with a view to purchasing towards the middle of the year and fixing their interest rate for around 5 years below 6%. I wouldn’t go over-board – and for my taste the “new” requirement of a 20% deposit is still a bit low. If  I was boring 20% I’d want to make sure I could still pay the mortgage on a single income if we are currently a dual-income household or have 6 months expenses saved if a single income household.

Photo Credit: Australia News