New Zealand


Expats Putting a Strain On Housing In Auckland, New Zealand

by Ray Clancy on January 30, 2015

New Zealand seems to be suffering from expats all wanting to live and work in the capital city with a committee hearing that this is putting a strain on Auckland’s property supply.

There are also concerns that an increase in immigration is fuelling a huge rise in property prices in the city as 2014 ended with a sales surge in the residential real estate market.

Sales were up 24.2% in December compared with the same month in 2013, the strongest December sales since 2006 and the second strongest December on record, according to the data from the Real Estate Institute of New Zealand (REINZ.)

new-zealandThe index also shows that median prices in Auckland reached a new record of $678,000 and the normal December slow down didn’t really happen in 2014.

In the 12 months to the end of December, Auckland’s median price rose by 13%, but the national median rose by only 5.4%. Even Canterbury, which has seen strong price growth during 2014 has seen its rate of price increase pull back to under 2% for the 12 months to December 2014.

According to REINZ the real estate market remains split between Auckland, with strong demand and price growth, and the rest of the country. While a number of regions are experiencing listing shortages the situation in Auckland is acute, with less than three months’ supply available and demand continuing to be robust.

The Zealand Reserve Bank has warned that immigration is having a big impact on house prices and there have been calls for curbs on the number being given visas. The bank’s governor, Graeme Wheeler, told a New Zealand parliamentary committee that he is concerned about migration levels.

‘Two years ago, net migration was zero and now it’s about 46,000 on an annual basis and 80% want to live in Auckland,’ he told the committee. He added that statistics over many years showed there was a strong correlation between house prices and migration.

‘Immigrants need somewhere to live and will add to the demand for houses,’ said NZ First Party leader Winston Peters, a frequent critic of the government’s immigration policy. He believes that immigration should be limited to skilled workers in categories the country needs.

Auckland is home to 1.42 million people, a quarter of New Zealand’s population. According to the 2014 Demographia International Housing Affordability Survey, which compares house prices with incomes in 378 cities globally, Auckland was ninth least affordable out of the 86 major cities and 14th overall.

The NZ First Party has drafted a new reform that would see the amount of property owned by foreigners counted for the first time in the country’s history.

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