2010 real estate in review: NZ market on growth ramp

2010 real estate in review: NZ market on growth ramp

New Zealand's property market is due for pockets of growth in 2011, according to the largest property group in Australasia Ray White.

Ray White New Zealand Chief Executive Carey Smith says that with the Rugby World Cup mid year he sees investment properties returning to popularity.

"The demand for construction in Canterbury and the increased infrastructure spend by the Government will have an impact on the growth of the property market in 2011 alongside market interest that will coincide with the Rugby World Cup," Mr Smith explains.

"Overall, as we move into 2011 the property market will remain consistent. Good properties will always attract a high degree of interest and when linked to a positive marketing campaign a premium price can still be reasonably expected."

He says a number of factors including the Canterbury earthquake had held the market back in 2010.

"Sales nationally during the past quarter have remained subdued. This is due to the lack of new properties that have come onto the market, the effect of the Christchurch earthquake as well as the extreme weather conditions in Southland," he said.

"While sales have reduced, prices have remained consistent, with the Auckland area having a small increase of 1.09 per cent on the same period last year. Nationally there has been a small reduction of 1.4 per cent. This should give confidence to those who are selling and buying in the same market."

Mr Smith says that properties are now taking longer to sell, with the average time for a property on the market being 43 days.

"This has increased from 31 days 12 months ago. While there is increased activity in the auction market, some areas still have an oversupply of property which does have an impact on the number of days that a property takes to sell. There still remains cautious buyer interest, with increased numbers through open homes during the past four week period."

While there is still some apprehension from buyers in the marketplace, Mr Smith says there is an increased confidence given that it is expected that interest rates will remain at their current levels for at least a 6 to 12 month period.

While some sectors of the New Zealand market took a hit in 2010, others hit their straps.

"Areas that have seen an increase are the lifestyle locations including the Upper South Island, the Bay of Plenty and some areas of Northland. This indicates that buyers are still being able to successfully sell their properties in the major city areas and are then making decisions to purchase, potentially for a lower value, properties in less densely populated areas," Mr Smith concluded.

ENDS

© Scoop Media