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More Buyers Than Property Creates A Resurgence In Property Values

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Contributor:
Brian Dalley
Brian Dalley

Is it nationwide or is it simply a case of big spending Aucklanders throwing their money around?

A headline More Buyers than Property came to my attention on the weekend but really did not go on to explain how this came about.

I was pleased however to read that the writer was not generalising and went on to point out it is happing only in areas ‘in demand’. However, as those areas increase in value, some of which already have, the areas less favoured will experience similar moves as investors look elsewhere for better returns.

Christchurch for example, and don’t get me wrong it isn’t a less favoured area by any means, in fact I am assuming they are experiencing the same uplift in sale volumes and property values as the better parts of Auckland.

Just last week, I contacted a number of real estate companies in Christchurch to advise I have several cashed up investors interested in the area and to date, still not one reply.

Is it simply a case of cashed up investors feeding off the demise of others? Not at all.

Well in some cases possibly and that is expected, as there will always be winners and people learning from mistakes.

OK then, so why the sudden surge of interest in property when it is evident that we are still not out of the woods.

Well we New Zealanders are quite a resilient lot really. Often we hear of reports that being on the other side of the world limits opportunity, whereas many of us take very little notice of what is being said about us and spend more time concentrating on what’s happening in our own back yards, something I feel a number of countries could learn from.

Sure recently New Zealand had to take time out as the world recession took hold, watching from the sidelines as other markets started taking Tua-like hits. It was a time to bide time for a little while, a time to take heed of the direction we were heading in and to make a few changes before moving forward.

I think all and all we as New Zealanders faired reasonably well. Property prices [self adjusted] in line with affordability, we have gone from an oversupply of housing to a more balanced approached from developers, builders and the like.

Many are now finding the grass wasn’t greener in other countries and are returning home. Companies have also learnt some valuable lessons and are now a lot more confident than they were twelve months, or even six months also.

So is this simply a flag waving exercise for property investors? Not at all, but it could be a very good opportunity to make some serious money in the foreseeable future, if investors do their homework and take action now.

I do believe when one takes a step back to look at the big picture, the average Kiwi could also benefit from buying property now rather than sitting on the sidelines, viewing opportunities like items on a conveyor belt that may never be seen again.

Just like investors, we all need to do our homework; factor in a margin for an increase in interest rates, take action, and in doing so could reasonably expect sustainable growth in net worth over a period of time.

Just remember, although all the answers are there, some will learn from the mistakes of others whilst the rest will be the others.

Brian Dalley is a leading Property Consultant | former NZMBA Mortgage Broker, and Real Estate Agent. You can read more of his views and opinions on his website www.propertyprofit.co.nz.

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