Published on 21 November 2005 at 03:22 pm
Filed under: Australasia:- New Zealand Property Guides » New Zealand Property Investment Potential
New Zealand is an incredibly attractive country for property investment and indeed for investment of any kind because it has a business friendly tax system, it supports and promotes international investment and it’s a stable country with a strong economy.
Furthermore international awareness of the attraction and appeal of New Zealand is now so strong that foreign demand for property for sale in New Zealand is at an all time high at the same time as GDP growth figures in the country are strong. This means that the property purchasing power of all consumers in New Zealand’s real estate market place is currently strong enough for continued price growth.
Over the last five years property prices in New Zealand have increased by in excess of seventy percent and have resulted in international property investors profiting substantially. The Reserve Bank in New Zealand have recently increased interest rates to try and slow this rate of growth down to a more long term sustainable level because it’s incredibly important that the domestic market in New Zealand can continue to afford property.
A property investor should not be overly worried by this fact, it does not mean that his potential for profit is being eroded; rather it means that first time buyers will not be priced out of the real estate market and the market is therefore unlikely to enter a period of negative growth or stagnation. From an investor’s point of view this is positive as negative growth would mean no profits and restricted rental yields whereas an increase in interest rates and a slowing of the market means that the profit potential will remain in place for far longer.
Because the Reserve Bank and the New Zealand government are acutely aware that they must control the rate of growth in the real estate sector they are taking the necessary action now to keep the property market on track for long term growth and success and an international real estate investor should take confidence in this fact and know that he is unlikely to be buying into a boom bust real estate economy.
Too many real estate markets worldwide are left to boom and then go bust and a property investor has to be incredibly careful to time market entry and exit correctly, in New Zealand historically this has not been the case and despite gains in excess of seventy percent in the real estate market in New Zealand as previously mentioned, prices for property are still not excessively high and compare favorably to countries like Australia, the UK, USA and Canada for example.
In addition to this fact the cost of living in New Zealand is comparatively low and the country always rates highly in global surveys of the best countries to live in in the world - this means that there is a strong international demand for property for sale in New Zealand as well that adds another dimension to the property economy and another dimension to a property investor’s potential for profit.
An investor in New Zealand can target the local market place with rental accommodation or properties for resale and an investor can also target the overseas market with holiday properties to let or second homes and holiday homes to buy.
An investor looking to profit from the domestic market in New Zealand will benefit because GDP figures are up, unemployment is down and demand for property is not abating despite rises in interest rates. This means that demand for property for sale and rent is high and can support rental rate rises and property price increases which equate to profit for an investor.
An investor looking to profit from international interest in New Zealand has tourists, retirees and expatriates to work with as well as an increasing number of international professionals seeking superior properties to let in New Zealand’s main towns and cities.
All economic indicators in New Zealand now point to the potential for a long period of steady property price growth and because economically New Zealand and New Zealanders are getting wealthier, the local market can continue to afford increasing property prices. Add to this the fact that international interest in New Zealand is intense and you have all the ingredients for property investment success.
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