If anyone has had doubts about the value of residential real estate as an investment vehicle, those doubts should have been pushed aside by a media release from the Real Estate Institute of NZ (REINZ) on 3rd March 2020.

Chief Executive of REINZ Bindi Norwell stated “with house prices up by 11.8% in January, the first month of the new decade marked a milestone in a remarkable 100 consecutive months of year-on-year median house price growth. Back in October 2011, the median house price for New Zealand was $359,000: 100 months later the median house price was $615,000 – a 71.3% increase. But as with every story, there’s always two sides, home –owners are likely to be pleased with the capital growth of their property – particularly if they’re planning on upgrading in the short to medium term, but for many people it shows just how unaffordable buying a house has become.”

The current shortage of property for sale combined with the low interest environment we have at present tends to suggest that prices are likely to remain strong if not escalate even further in the coming months and years. Further reductions in the Official Cash Rate are being touted by market commentators and this is likely to result in even lower mortgage interest rates.

From a home seller’s perspective, the current market climate offers an opportunity, for home owners to achieve a positive sales result or to free up some of their capital gains to pursue other life style opportunities. For home buyers, we acknowledge that it is a difficult market but is it likely to get any easier? We doubt it so every effort should be made to get on the property ownership ladder as soon as possible.

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