Risky Business?
April 1, 2018

Posted by lindsay on November 18, 2013

Recent articles in the NZ Herald have focused on the drastic increase in New Zealand property prices. Just the other day in fact, a couple purchased a house on the edge of Auckland’s city centre for $1M, $400,000 above its valuation. Supply is low, and demand is high and people are willing to stretch their limits to get on the ladder.

While this is good news for sellers, the same can’t be said for investors. Many individuals looking to rent their properties are struggling to find tenants. REINZ suggests this could be a result of renters moving into home ownership, or simply staying for longer periods in their rental properties. Regardless, many investors are left to consider whether to drop prices in an effort to inhabit their properties.

Compare this to the situation in the United States. Forbes magazine says that with many homes still being foreclosed, supply for rental properties is low because demand is so high, particularly in central city locations. Included in the top areas for 2012 – Cleveland, Ohio and Memphis, Tennessee. With confidence about growth in local industries, those who can afford to buy are taking advantage of the opportunities for property investment.