REINZ (that’s Real Estate Institue of New Zealand) reported that the median sale price of real estate across New Zealand dropped $4000 to $516,000 in December. For Auckland, the median was $840,000 and had fallen about 1.4%.
REINZ projects 2017 will get off to a slow start. This is not something to be worried about. Its normal for the property market to slow down in December, January and February. Usually we have to wait until March 2017 before we know for sure whether the market is slowing.
From a foreign investor’s point of view, New Zealand is still seen as a safe haven compared to the economic uncertainty in Europe and political uncertainty in USA.
The anticipated interest rate rise by the Fed in December may have made investors more careful and wary. Sure, it may keep marginal investors out of the real estate market but serious investors won’t be put off from buying properties where the price makes sense.
In the end, it’s better to not speculate. Don’t try to speculate on house prices but buy when it makes sense from a financial and investment point of view. Do the maths. If the yields make sense and you can service the debt payments, and its ticks your investment criteria. Sometimes best purchases are made when the speculators have left the market and everyone else prefers to sit on the sidelines and watch. The hotter the market, the less likely you can find good deals.