A Promising Start For Investors

Posted on Thursday, February 10 2011

A promising start for investors
Those who own a house should be thankful after seeing the headlines depicting the shortage of rental properties in Auckland. And those with a few spare houses might well consider themselves very fortunate indeed. Despite the hammering property investors have received from the government, the year ahead looks quite favourable for investors. With the lowest rate of building consents since 1965 (when the population was only 2.6 million), it is hardly surprising we are experiencing a housing shortage. It is estimated we will require at least 20,000 households a year for the next 20 years, half of which will be in Auckland. With consents running at less than 15,000 in 2010, there’s plenty of garages becoming occupied! With high rents and low interest rates, surely first home buyers must be stirring. Especially if you have a Kiwisaver egg to crack. And mum and Dad might lend a hand if it finally rids the home of the thirty year old ‘kiddies’.

Surely investors will begin to find the increasing yields appetising. How many of the 80,000 predicted Rugby World Cup visitors will consider our land a favourable investment haven? How many Kiwis in Australia will get fed up with fires, floods, forty degree temperatures and force five cyclones (did I mention droughts?). No Bernard, they wont be moving to Phoenix Arizona, even if they were giving away the houses….

Perhaps incentives for new homes are needed (part GST rebates or depreciation allowances for new homes?) We don’t need a glut but we don’t want half the builders disappearing overseas either! Failing this, its hard not to envisage property price increases at some stage this year, including apartments. Even if this doesn’t eventuate, investors should be well pleased with the increased rental providing they havn’t relied too much on depreciation claims. There shouldn’t be any more nasty surprises in an election year! Perhaps we will continue mirroring the property market of 10 years prior though 2011? (the market was pretty flat then picked up in the last quarter) We pray this time however, that the only terror to be evoked will be from our winning rugby team!

Rene McLean.

 

 

 

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Property InDepth Rene McLean

Rene McLean - Auckland Franchiser. Property InDepth is New Zealand\'s only fully franchised property valuation and property consultancy service. The only valuation service that can provide comprehensive reports to you, within hours of completing the inspection. So relax and enjoy the experience, that's what we are about.

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