As summer turns into autumn, those purchasing residential investment property might find it comforting to know that New Zealand's premier property hotspot is in a solid economic position. New research from Auckland City Council shows that the housing market, immigration and employment are each playing a big role in supporting the City of Sails.
Chris Parker, chief economist at Auckland Council, released his quarterly research into the city's economic future. Confirming what everyone's probably already realised, Auckland's housing market is red hot. According to his analysis, house prices were 16 per cent higher than the year earlier, while prices elsewhere in the country dipped downwards by 4 per cent.
As well, he pointed out that new house building is increasing, reaching the highest peak since 2005. In fact, house prices in Auckland have expanded 5 per cent over the past three months and an eye-watering 43.8 since 2007, according to QV.
Despite housing industry cries that public policy makers could improve the supply of housing to meet the rocketing demand, Mr Parker noted that even the most well-functioning of property markets can see astronomical price rises.
"It can be a market's 'call to arms' for people to invest, innovate, and repurpose resources (in this case land) to meet unanticipated or emerging needs," he said.
"The economic issue is whether or not there are barriers that prevent a market from making the adaptions that it needs to make to moderate prices."
This has a lot to do with Auckland's burgeoning population. His report also shows that encouraging net migration is buoying the economy, as more and more people choose to make the city home. This comes after Statistics New Zealand released its figures into the country's population gain. Using that information, Parker revealed that Auckland gained an additional 23,006 people in December last year, given 45,126 arrivals and only 22,120 departures.
Impressive migration is also supporting retail spending, keeping wages prices up and boosting employment figures. All in all, Auckland looks like it's in a pretty good space. With its economy growing, it's important to get investment advice from an Authorised Financial Adviser. They can help you decipher what this means for your portfolio and find a great range of investment options.
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