Investors pulling out of New Zealand markets

Property investors in New Zealand are pulling out more now than ever. Furthermore, the central bank plans to level high rates until at least the middle of 2008.

A damper has been placed on the New Zealand investment property market. As property investors face increasing costs and a lack of available housing, they are pulling out of the country.
According to the Property Investors Federation – a local property organization – an increase of some 35 per cent in the number of properties on the market is due at least in part to the number of property investors walking away from the New Zealand property market.

Furthermore the very high interest rates here are making the property market even more difficult. The key benchmark interest rate is set at 8.25 per cent, which is a very high number to take advantage of, especially for first time home buyers. Additionally the sheer cost of property, which continues to remain the most costly in the world on average, makes investing difficult.

The New Zealand central bank also took note of the fact that it would not be cutting that rate at least until the middle of 2008. Inflation is another key problem and that is where the bank's interest currently lies.

As property investors here see the costs of property ownership rising, many are putting properties on the market and leaving the industry.