Invest
Could Australian property follow NZ’s lead?
Despite facing lockdowns and an election, New Zealand property is moving from strength to strength, with a researcher tipping the Australian market could follow.
Could Australian property follow NZ’s lead?
Despite facing lockdowns and an election, New Zealand property is moving from strength to strength, with a researcher tipping the Australian market could follow.
InvestorKit’s head of research, Arjun Paliwal, told Smart Property Investment that record-low interest rates, consumer confidence and disposable income usually reserved for travel are helping guide the New Zealand property market forward.
“Over the past year, September to September, New Zealand house prices have moved up by over 14 per cent,” Mr Paliwal said.
“The commentators in New Zealand are talking about the impact of low interest rates, removal of loan-to-value ratio restrictions and the impact of people having fears of being priced out in the future.”
Mr Paliwal explained how New Zealand being a world leader on the COVID-19 pandemic is helping its property market.
“New Zealand has a high level of confidence given how they handled COVID compared with the rest of the world as well as a somewhat return to normality,” the researcher said.
While investors and owner-occupiers are confident to enter the market, they are facing a shortage of supply which is further driving up the prices of New Zealand houses.
“There’s a very low level of supply in New Zealand from an available land to low levels of construction,” he said.
While highlighting New Zealand’s strengths, the researcher pointed to the similarities between the New Zealand and Australian housing markets.
“If you bring it back to an Australian space. Does Australia have low interest rates? Yes, ours are lower.
“Does Australia have improved loan-to-value ratios? Yes, we have up to 90 to 95 LVRs, which is getting stronger because of government support for first home buyers.”
“Do Australian buyers have a fear of being priced out? I believe this is starting, we are starting to see high attendance at open homes despite low stock.”
“Now, do we have low supply? Overall, Australia does with building approvals dropping substantially over the last few years and with the current supply on market most of Australia is seeing low interest levels,” Mr Paliwal explained.
However, the researcher noted one key difference that is holding the Australian market back.
“The only difference is fully across New Zealand there’s an increased level of sentiment due to the handling of the COVID-19 pandemic.
“In Australia, there are increased levels of sentiment but not at the same levels to New Zealand, which can be attributed to Victoria’s lockdown and border closures,” the researcher noted.
Mr Paliwal believes that if the government can successfully handle future outbreaks of COVID-19 that Australia’s market could follow New Zealand’s.
“If we get to a moment where the states are opening up, and people being able to move where they want to, then we may see some of our regions – particularly sea change, tree change and affordable markets – really start to continue their momentum,” Mr Paliwal concluded.
About the author
About the author
Property
First home buyers brace for strengthening headwinds
While Australian first home buyers dominated the market in 2020, increasing their market share by 50.4 per cent in the past year, they're likely to face strengthening headwinds as prices soar. ...Read more
Property
Australia’s most popular rental suburbs revealed
Tenants should brace themselves for rental price hikes as tightening vacancy rates continue across the country, new research has revealed. ...Read more
Property
Australian home values rise at fastest rate in 17 years
Overall, Australian home values surged 2.1 per cent higher in February, the largest month-on-month change in CoreLogic’s national home value index since August 2003. ...Read more
Property
Housing finance records continue to tumble
Australian housing loan commitment has reached another record high in January, rising by 10.5 per cent in the last month alone, official figures show. ...Read more
Property
Detailed forecast: How will the capital cities perform in 2021?
With most of the property market finding its footing by the end of 2020, after the COVID-induced disruption, experts have grown optimistic about the future of real estate in a post-pandemic world. ...Read more
Property
‘Allowing super to be used for deposit will jack up house prices’
Capital city prices could soar if the backbenchers’ continued push to enable first home buyers to access their super to fund their home deposit is given the green light, a super lobby group has said...Read more
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
Property
First home buyers brace for strengthening headwinds
While Australian first home buyers dominated the market in 2020, increasing their market share by 50.4 per cent in the past year, they're likely to face strengthening headwinds as prices soar. ...Read more
Property
Australia’s most popular rental suburbs revealed
Tenants should brace themselves for rental price hikes as tightening vacancy rates continue across the country, new research has revealed. ...Read more
Property
Australian home values rise at fastest rate in 17 years
Overall, Australian home values surged 2.1 per cent higher in February, the largest month-on-month change in CoreLogic’s national home value index since August 2003. ...Read more
Property
Housing finance records continue to tumble
Australian housing loan commitment has reached another record high in January, rising by 10.5 per cent in the last month alone, official figures show. ...Read more
Property
Detailed forecast: How will the capital cities perform in 2021?
With most of the property market finding its footing by the end of 2020, after the COVID-induced disruption, experts have grown optimistic about the future of real estate in a post-pandemic world. ...Read more
Property
‘Allowing super to be used for deposit will jack up house prices’
Capital city prices could soar if the backbenchers’ continued push to enable first home buyers to access their super to fund their home deposit is given the green light, a super lobby group has said...Read more
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
