Property investment in New Zealand for 2023

Advertisements

Building an empire is about much more than saving money, buying a nice car, and hoping for the best. It’s all about thinking long-term and making sure you can achieve your financial goals, whatever they may be.

Correct input. 2023 has seen some major economic ups and downs. This has had a major impact on the New Zealand property market and economy.

What is the current state of the economy in New Zealand?

We started the year with headlines about the impending recession, so naturally we wrote an article about it: How Will the Recession Affect Me? We have had many clients, friends and family contact us, upset that the media is pushing a useless story. New Zealand, for the most part, is immune to the global financial crisis, but it came as no surprise that the NZX fell as much as 20% in some cases. Four in five New Zealanders are investing, according to research by the Financial Services Council, so this would be a concern for many families.

To rein in rising inflation, the Reserve Bank of New Zealand (RBNZ) has steadily increased the OCR (Official Cash Rate of Exchange) throughout 2022. We started the year at a low of 2.00, rising up to 3.50 (as of October 2022). ), which means that the cost of borrowing money is more expensive and borrowing and interest rates have increased.

The effects of the pandemic, COVID, and the war in Ukraine, along with severe supply chain issues, have driven up the cost of living and inflation, which naturally causes people to tighten their portfolios and not want to spend for fear of losing money. there is housing. market collapse.

What about the housing market crash in New Zealand?

Once again, headlines and media confusion played a big part in this. Interest rates have been lowered significantly during COVID to ensure people spend and grow the economy, all the way down to 1.99%! Naturally, this extremely low interest rate in a small country could not be sustained, so it returned to pre-COVID levels. Even now, there are clickable headlines that say “20% reduction in home prices.” While this is true, the headlines report mostly real estate sales (which is a small part of the data), and miss the 35% increase during the COVID period in home prices, which was not reported. . first.

Where is the best place to invest in New Zealand?

Aotearoa may boast some of the most beautiful beaches and seaside towns the world has to offer, but your best bet is the big cities, such as Auckland, Tauranga, Christchurch or Wellington. These cities are where all the jobs are located, and they will be large and stable to avoid any risks or market fluctuations. Major cities have adequate infrastructure to accommodate housing investment and development, with public transportation, public areas, and options of schools, malls, and shopping malls.

Advertisements

What we have seen really catch fire is the ‘Golden Triangle’. Hamilton, Tauranga and Auckland are great for getting a steady return on your investment and are relatively safe regions. Christchurch has great value, but the EQC (Earthquake Commission) is still a point of concern, so make sure you have the right insurance advice when it comes to that ever-changing city.

What to look for when investing in a property?

Returns, capital gains, infrastructure, and making sure the property you invest in helps you achieve your goals. See what is planned for the development of that region or area in the next 10 to 15 years, because this gives a good indication of the growth of the region.

Some people may not focus on owning and making money, some people just want a nice bag to take along for the summer vacation. Some folks are looking to buy and hold, or others are looking for one they can quickly upgrade and flip.

If you’re looking to make money, you’ll want to make sure you’re targeting around 3%-4%+ returns. But, you also have to evaluate it correctly. If you make more money on your investment property, room or house hunters will most likely choose a cheaper option.

Property Empire: The Experts In Property Management.

Property Empire are experts in counseling tenants and owners, making sure everything is up to code and finding the right tenant. If you are looking for an investment property in New Zealand/Aotearoa, be sure to get in touch with the team and ensure you are getting the best return on your investment.

A checklist for when you’re looking to invest in property:

  • Location: You want renters who are able to pay on time and keep the house in good condition, so check if the house is somewhere that will allow you to get the best type of tenant. Are there benefits, perhaps by a train station, close to schools, or has a great sense of community? Are you looking for an all-year property, or will it be seasonal?
  • Development: What are the future developments in that area? In that region? In that city? What is being supported by local governments and national governments? Is there something with the land you could look at? What is being done to further where you’re buying?
  • Infrastructure: What is being funded to support the growth of the area you’re buying in? How far does a potential tenant need to travel to get to where they need to go? How good is the public transport system or schools in that area?

If you are investing in New Zealand property from overseas, give this article a read. Although we don’t have a crystal ball, we can pretty much capture what’s good and where.

Advertisements

Leave a Reply

Your email address will not be published. Required fields are marked *