At Assured we’ve noticed a strong pickup in demand for our investment property in the last few weeks. We’ve also seen a huge increase in competition when buying land for development in Hamilton City. There are a lot of buyers looking for development land and this is pushing up inner city brown-field re-development land prices.
The increase in the cost of development land will in turn increase the price of completed residential property in the city. I believe we will see a strong increase in the cost of townhouses and duplexes in Hamilton City as developers will need to raise the sale prices of their off-the-plans sales in order to cover the higher land costs. We expect to see prices on off-the-plans property rise by at least 5% early in 2020 when new housing stock is listed for sale. A 7-9% increase in house prices is very possible in Hamilton over the course of 2020. It could even rise more if this competition for development land intensifies.
Overall things in NZ are already pretty good, aside from the muppets in government. Inflation is running at 1.5%, GDP is 2.4%, unemployment is running at historically low levels, mortgage interest rates are in the low 3% and the housing market is springing into life around the country with most agents reporting lots more people at open homes and lots more sales enquiry, just like we have seen. The latest stats show price rises on property of 2.4% in the August/September months.
Regarding the NZ Herald article, Westpac economists are saying in their quarterly outlook that the worst is over and an economic recovery is likely to be underway in New Zealand. It was a grim winter for business with GDP growth slowing, business confidence plummeting and trade war fears on the rise.
Data is now pointing to solid gains in retail and agriculture, rising house prices and a longer than expected construction boom.
John Kenel
Assured Property
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