New Zealand feels pinch

Many feel the pinch of the current market squeeze, but homeowners who want to ride out the storm will need more behind them.

Location and features will be key things to determine if the value of a property is worth more or less in the current New Zealand housing market. For those property owners that want to make it past the property slump and still want to sell, being in the right location will make the most significant impact.

Some areas will suffer more than others. According to experts, those locationswhere it is sunny, where the sea is in view from the home's windows, and those that offer desirable features will do better than those properties without such amenities. Properties with these benefits are likely to hold their value better and longer, and perhaps recover faster from any fall in house prices surrounding them.

Being in the right location will make a sizable difference. Auckland and the Bay of Plenty are likely to continue to do well because of the demand for properties in this area being so high. More so, that demand will not diminish. In other areas, such as smaller towns, the risks are stronger because of the lessened amount of demand.

There is no sign in the near future of rate cuts either, that could help such markets. With inflation a continuing problem in New Zealand, no rate cut is likely and most economists are predicting the rate will remain at 8.25%.

According to Tony Alexander who is BNZ's chief economist as reported by the New Zealand Herald, "We are masters of our own misfortune because we like to borrow a lot and we are prepared to pay interest rates to borrow money that people overseas would not touch with a barge pole." He then continued, "It's not until you get the likes of two year fixed rates at about 8.5% that the housing market in New Zealand corrects downwards."

BOOKMARK THIS PAGE (What is this?)