Tina Morrison of The National Business Review writes:
“New Zealand property values rose at a 7.6 percent annual pace last month as demand continued to outstrip supply in Auckland and Christchurch”, state valuer Quotable Value says.
“Property values stepped up the pace from last month when they increased at a 7.1 percent annual rate, also driven by demand in Auckland and Christchurch. Values increased 2.8 percent in the three months ended June 30, up from a 1.7 percent quarterly pace in May”, the agency said.
“The strong increase in values is largely constrained to Auckland and Canterbury, with values across the rest of the country still largely subdued,” QV operations manager Kerry Stewart says.
One doesn’t need to be a rocket scientist to work out what is underpinning the heated property market in both Auckland and Christchurch – the bottom line in my opinion is supply. The aftermath of the earthquakes saw more than 6,000 homes taken out of the Canterbury market – it really is no surprise that we’re now beginning to see upward pressure on property values. When demand outstrips our housing supply, it results in premiums being paid for both rentals and property purchases. It’s not a lot different to my farming days really, when there was an oversupply of beef the prices came down and vice versa – the laws of supply and demand will always prevail!
Obviously in Christchurch, post-quake we literally have fewer homes in circulation, combine this with high demand for rentals and it is not hard to appreciate that this literal lack of housing becomes the predominant driver for this current unprecedented intensity and growth.
One thing this clearly points to is capital gains – one of those bonuses that comes with owning property, and no better place to find such gains than Christchurch at the moment!
Why not take the first step? You won’t look back!