We've been hearing in the last few weeks about a slowdown in many areas of the economy. Particularly, the dairy industry and the housing industry. In his financial stability statement in early November, Reserve Bank of New Zealand Governor Graeme Wheeler noted that high immigration flows meant there was still risk of the housing market crowding out, and that the overall economy was susceptible to slowdowns on a global scale – particularly China.
But is it really all doom and gloom? We don't think so, and neither does ANZ. In its monthly Property Focus release for November, the bank noted that the construction sector is doing extremely well, commodity prices are up, and the immigration flows are strengthening the economy nicely.
The bank also believes that a slowdown in the economy is natural – economic expansion is settling down, and the growth of the GDP should end up somewhere around the 3 per cent mark, or just below it.
And while high population inflows are pushing up prices of homes in the central Auckland market, it's important – especially for anyone interested in property investment – to remember that the regional areas of New Zealand have a lot to offer. ANZ said in Property Focus that there were many regional real estate projects coming up, which should entice anyone looking to buy property for positive gains.
Real Estate Institute of New Zealand figures showed that in the Waikato/Bay of Plenty region, October median home prices were $341,750 – and rising. This provides a great opportunity to buy an affordable property and make some good rental returns in a city like Hamilton. That hardly sounds like gloom to me!
Here's to your financial independence!
Daniel Carney
Authorised Financial Adviser / Investment Property Expert