While slump’s the word being used to describe the local housing market, some improvement is likely for next year.
Meanwhile, it’s already good news for buyers based offshore as, taking advantage of a depressed kiwi dollar, they snap up some bargains.
ASB Bank’s latest economic report, headed Housing Market in a Slump, says it’s likely to remain weak for the rest of this year as the migration outflow, high interest rates and an oversupply of housing continue to bite. The number of dwelling consents last month was 34 per cent down on September 1999, while national house sales fell more than 19 per cent.
However, ASB Bank economists say that, over the medium to long term, the outlook is more positive. That’s because:
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Interest rates should start to fall towards the end of next year;
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The population growth rate is likely to pick up modestly as the migration outflow slows;
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Consumer confidence should improve as higher export incomes feed through to the domestic economy; and
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The lower level of building activity should bring housing supply and demand more into balance.
Bayleys Research reports that the very low dollar is already encouraging more American and English buyers into our market. It says a significant number of these are expats either looking to buy an investment property or a residential/lifestyle property they can return to permanently or for holidays.
Most of these are being sourced off the Internet, with many purchasers then getting local friends or relatives to check them out. Recent sales handled by Bayleys to offshore purchasers include:
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Villa del Pescador, a house in Kerikeri which sold for $980,000 to a young couple from London. The 650sqm Spanish-style villa has seven bedrooms, six bathrooms and views to the Bay of Islands over Kerikeri inlet.
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A cedar home on the hill above Paihia, which sold as a holiday home to an expat living in Washington State, USA, for $650,000.
