Earlier last year a study was released in New Zealand, detailing the affordability of housing in seven major countries around the world: Canada, United States, United Kingdom, Ireland, China, Australia and New Zealand. The report stated that, in order for a home to be considered affordable, it should be no more than three times the total income of its owners.
Results classed New Zealand as a severely unaffordable market, with the average home (in main centres) being upwards of seven times above owner income, and of course since this study the situation has got even worse in some NZ cities. In contrast, while America had some expensive cities, the majority of metropolitan areas sit under the 3 mark. Investors interested in purchasing kiwi land might look at this as a bonus; if prices are high then certainly competition to buy would be low.
Unfortunately this just isn’t true. Buyers are willing to pay a hefty price, simply to get on the property ladder. Even if they weren’t however, consider the commitment of property investment in the southern hemisphere versus the northern. What will rent be as a result of cost? Will you have enough interested tenants? How much return can you expect to get when you eventually do sell? And will the buyers still be there in such a small country?
Research and knowledge are key to getting the best deal, and, at the moment, America is a worthy contender in the fight. To read more explaining why, click through to the full report: