New Zealand
New Zealand is the fifth best performer in the world
in the latest Global Property Guide’s global house
price survey.
Nationwide median house prices surged 8.36%
during the year to end-Q1 2014, after year-on-year
rises of 8.02% in Q4, 6.4% in Q3, 5.11% in Q2,
and 7.19% in Q1 2013. In Q1 2014, house prices
increased by 2.66% from the previous quarter.
Caterbury/Westland registered the biggest house
price increase, with a 12.4% y-o-y rise in February
2014. It was followed by Auckland (10.7%) and
Southland (8.3%).
While house prices started to fall in early 2008
following the global economic recession, the decline
was much less than in other countries. During 2008,
house prices fell 8.94% (-11.91% in real terms). Then
in 2009, house prices rebounded by 5.23% (3.21% in
real terms). However in 2010, house prices fell again
by 1.63% (-5.44% in real terms). The housing market
recovered in 2011, with house prices rising by 2.91%
(1.04% in real terms). In 2012, house prices rose by
6.52% (5.54% in real terms).
Residential building consents surged by 27.5%
during the year ended April 2014, according to
Statistics New Zealand. Likewise, the total value
of dwelling consents soared 28.8%. Despite this,
median-days-to-sale fell by one day, to 34 days in
April 2014, compared to a year ago.
NZ’s propert y market is expected to remain
strong in 2014, amidst strong economic growth.
New Zealand’s economy is expected to grow by
3.3% this year, its strongest performance since
2007, according to the International Monetary
Fund (IMF), after modest real GDP growth of
2.4% in 2013, up from 2.7% in 2012, 1.4% in 2011
and 1.9% in 2010, according to HSBC. Next year is
expected to see New Zealand’s strongest economic
growth since 2007, with projected GDP growth
www.reimag.co.za
of 3.3%, led by a surge in household spending,
according to the Organisation for Economic
Cooperation and Development (OECD).
House prices in New Zealand are expected
to continue rising, albeit at a slower pace, as
demand continues to fall mainly due to a new
rule restricting high loan-to-value ratio (LVR)
lending. In April 2014, tota l dwel lings sold
were down 20.2% year-on-year to 5,670 units,
according to the Real Estate Institute of New
Zealand (REINZ). The average floating mortgage
interest rate remained unchanged at 5.8% in
February 2014 from a year earlier, according to
the RBNZ. On the other hand, the two-year fixed
mortgage interest rate increased to 6% in February
2014 from 5.5% in the same month last year.
The Reserve Bank of New Zealand raised its
official cash rate (OCR) by 25 basis points to 2.75%
in March 2014, for the first time in three years.
Non-residents are generally allowed to buy houses
in New Zealand. However, purchase of property
does not give the buyer the right to live permanently
in the country.
RESOURCES
Global Property Guide
Offshore Handbook 2014
49