What does population growth mean for my investment?
New Zealand's property market is soaring onwards and upwards. Humming along in the background is one of the biggest drivers of this success – population growth. A booming populace drives demand and spurs construction across the country, as well as stimulating economic growth. Residential property investment could also reap the benefits of these increases, with a distinctly international flavour to the housing market.
Investors might see this as a great opportunity. The growing number of people means increasing demand for accommodation, supporting house prices and driving demand for property. These statistics come ahead of the most recent house price data from QV's house price index, which reveals that the average house price rose 6.4 per cent over 2014 and 3.1 per cent in the three months to February.
There could be even more growth, with Statistics New Zealand revealing that migration is having a definite impact on population growth. Net gain from international arrivals surging to a new record of 5,500 people in January and the data for the whole of 2014 is similarly impressive. It shows that net population gain hit around 53,800 people over the 12 months to January 2015 – almost double the 25,700 seen in January 2014.
While international arrivals have some influence over population growth, the combined effect of domestic demand and offshore migrants spurs demand for property – especially in Auckland. House prices appear to reflect this soaring taste for property. A dwindling supply of homes is doing little to offset the blossoming prices.
It's important to keep each of these factors in mind when deciding on investment strategies. A combination of elements is more meaningful than single statistics. An Authorised Financial Advisor like us here at Goodlife can help you decipher this data and provide reliable investment advice.
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