New Zealand Investment Property Activity

March 2006 saw New Zealand investment property activity heating up according to the latest statistics from the Real Estate Institute of New Zealand and Harcourts, which is the country’s largest real estate company.

The statistics reveal that investor confidence in New Zealand remains strong and that the favourite investment vehicle for private investors is still residential real estate - despite a previously perceived slowdown of the residential property market. 

The increase in activity has continued this month and was significantly boosted yesterday by the auction of over 78% of the 700 sections currently available at the Christchurch Pegasus development; 122 million New Zealand dollars were raised from property sales at Pegasus in just under seven hours.

The number of houses sold in New Zealand in March 2006 rose sharply across much of the country; in areas such as Christchurch and Auckland property sales were significant and demand for new housing stock is continuing to increase which ultimately results in higher prices being chargeable for properties for sale and in homes being on the market for a far shorter period of time.  Both of these factors can help an investor potentially generate higher yields and capital gains from New Zealand property.

Commenting on the New Zealand investment property activity in March the CEO of Harcourts, Bryan Thomson stated that “given the increased written sales in March, increased competition for mortgages driving interest rates down, and a shortage of quality properties available […] the next few months will be interesting to say the least.”

Judging by the property investor activity at the Pegasus township development auction in Christchurch yesterday as previously mentioned, Bryan Thomson’s predictions are already coming true.  The development is a lifestyle concept of homes and leisure facilities to be created on a site covering three hundred and forty hectares.  The promotion of the Pegasus township has been so successful that demand for the lots and houses available for sale at auction and off plan yesterday was unprecedented in New Zealand.

The auction took less than seven hours and almost all of the units currently available have now been sold.  Demand already exists for the next phase of properties to go on sale although they are not due to be released for six months, the whole development will take until 2015 to complete.  Property investor activity was as intense as residential home owner activity yesterday as people clamoured to purchase what may prove to be some of the most exciting property in New Zealand to come onto the market in many, many years.

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