If you're thinking about how to create wealth through real estate, you might know that your fortunes are tied to the state of the market one way or another. Like a truly well-baked Pavlova, there are numerous ingredients and factors involved. We've talked night and day about things like cash rates, interest rates and other economic factors. But if you're serious about investment property, it could pay to also keep one eye looking beyond our shores.
According to 23 November report by Statistics NZ, 229,400 visitors from overseas graced our country over October. This is 18,800 up from the same month a year ago, and reflects a growing trend of people wanting a taste of what New Zealand has to offer. The biggest increases in arrivals were from China and Australia, which were respectively up 7,500 and 5,900.
So why should this matter to those in the property investment game?
Coast to coast
Every single visitor who comes to this country brings the possibility that he or she will settle here, potentially even bringing along family members on the next haul over. Of course, these migrants will need housing, with many choosing to rent as they familiarise themselves in this new land. This is where your property investment is valuable, providing a much-needed home for these people.
The 2013 census showed that more than one in every four people living in the country was born overseas. Of these, 31.6 per cent were born in Asia, making them the most dominant ethnic group of non-NZ-born residents.
Furthermore, the Stats NZ report shows that the country experienced a record high in net migration (more people staying than leaving). In seasonally adjusted terms, there was a net gain of 6,200 permanent and long-term (PLT) migrants in October. Maybe it's the scenic surroundings, warm hospitality of the locals or simply the abundance of great fish and chips joints, but either way, our country continues to be an attractive place to settle in. The release mentions that New Zealand has been consistently breaking records in this area since August 2014 when the number was just 4,800.
Figures show that Auckland was responsible for drawing in a large chunk of this growth – more than half, in fact! This can only bode well for property investments in the city, as more people pouring in means more demand for your rental home. Evidence of this can be seen in Trade Me's rent price index, which showed that Auckland's rental prices were up 7.6 per cent in the year to October. Grabbing your slice of residential investment property in Auckland will mean you get to reap the returns of this heavy migration influx.
But be sure to contact the experts at Goodlife Financial Advice to see your options on how you can go about this.
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Expert
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