29 May 2012
Investors are realising the real benefits of property investment according to BNZ economist Tony Alexander. A strong and improving housing market is helped by low interest rates and poor returns from other forms of investment, creating a “go” trigger for investors, Alexander said.
These combined factors have meant that property is currently seen as the best investment option, backing up a recent ASB investor confidence survey in which respondents believed that it offered the best returns.
Alexander believed that the predictions of improvement in the market were helping the “go” trigger” as there is an increasing expectation of price rises rather than falling prices.
On top of this, risks attached to other investments and low interest rates which are set to stay low are making it a more straightforward decision for investors.
“House prices are now rising and people are comparing the cost of borrowing with the possible capital gain and lumping onto that the scope for good rents growth afforded by what they now accept to be a shortage of property in some parts of the country”
These factors are reflective of a predicted improvement in the strong housing market and highlights why investing in New Zealand property is growing as a viable option for overseas investors.