New Zealand’s property market is a lot like its famous gold rush days: big, spectacular, but with a lot of land left for future generations to inherit.
The average sale price for a house in New Zealand rose by $5.7 billion over the past year, the highest rate in the world.
And this despite the fact New Zealand is now the third most expensive country in the developed world.
“New Zealand’s real estate market is really a bit of a gorgon,” says real estate analyst Michael Lien, who is based in Auckland.
New Zealand has long been a world leader in buying and selling real estate. “
But there are other, smaller, areas of the market where you have very low, often zero sales.”
New Zealand has long been a world leader in buying and selling real estate.
Its wealth and the country’s low cost of living, combined with an ageing population, have led to an average price of $2.7 million per home in recent years.
But even these modest prices have helped the country to become the third-most expensive country for the sale of homes in the Americas.
The first $10 million of land to be sold in New Zealand was in 1974, according to real estate records, and the average price was around $2 million in the 1990s.
The average price has risen to $5 million in recent decades, but there is still some room for growth, according the New Zealand Institute of Economic Research.
“It’s really, really high,” says Lien.
“People are interested in the houses, and they want them to last a long time.”
And in that sense, the real estate boom has had an incredible impact on the housing market.
“But the price of homes sold in Auckland have soared since the property boom, with the average selling price jumping from $5,300 in the 1980s to over $7 million in 2017.”
He thinks the market has a lot to do with the government’s new land-pricing regime.””
We don’t see the supply-side of the economy growing very quickly.”
He thinks the market has a lot to do with the government’s new land-pricing regime.
“The government has been selling land to fund the housing affordability package, so we don’t really see the land being available for rent for much longer,” Goulbur says.
“That’s the main reason why Auckland is so expensive, because the government has taken out the land for housing.”
Goulburn points to the fact that New Zealand has had a shortage of homes for sale in recent months, and there is a growing sense of desperation in the property market.
“As demand has gone up, prices have gone down,” he says.
“There is an increasing sense that you don´t want to be stuck in a market that is not very well designed for the people who live in it.”
The market is also changing fast, with new development in Auckland, which has seen a rapid increase in land-use planning, has also driven prices.
In Auckland alone, the average sales price for new homes in 2016 rose from $3.7m to $7.9m, a nearly four-fold increase.
While the average sale is a huge deal for people who are buying homes for the first time, it also has an impact on their incomes.
“For some people, it’s going to be really difficult to find housing,” says Goulbrown.
“You may find that you can’t afford the mortgage, and you may find yourself with very little to spend on your home.”
If you are interested and want to help, the best way to get in touch is via the website Auckland Renters, which lets you find apartments and properties for rent in the city.