NZ house prices won’t see 2007 highs for 10 to 20 years
Interesting call by Bernard Hickey of Interest.co.nz (thanks Diversity for the pointer). He suggests we won’t see the highs in NZ house prices seen last year until 2018 at the earliest.
I have quite a different view on this. A big chunk of the NZ price rally in recent years was correcting a real estate arbitrage.
Currency, global wages, proximity of external money (Australia as an example) are just some of the other big factors. Real estate valuations are no-longer just about local economic factors. I have several colleagues in Australia who got involved in NZ property in the last few years. Higher Australian wages, favourable currency exchange and low airfares really changed the spread (difference in value) between buying in some Australia cities versus some beautiful places like Queenstown in New Zealand.
Good beer over some rugby chat is the icing on the NZ cake and I’ve never met a New Zealander I don’t like.
Interest.co.nz have some good viewing and reading. I really respect that they take a view. Sitting on the fence is damn boring and it hurts. That’s why markets never sit there.
March 26th, 2008 at 7:02 am
hmmm - you’re right when you say that the playing field has globalised and therefore NZ is somewhat insulated, and also it’s a fact that security concerns elsewhere buoy our property values significantly however the rally we’ve experienced here was of the magnitude that I’m not sure if it can be called a correction - I agree that 2018/2028 is a pretty long term call, but I’d be surprised to see any meaningful capital gains this decade at least
March 26th, 2008 at 9:02 am
Only a correction in spread difference I was referring to. The outright is large I agree. We haven’t even hit tough times yet, it will be interesting to see what worsening employment does.