consider this – December 2005: The world’s property experts predict that 2006 will be a bad year for the New Zealand property market because affordability has left the market, first-time buyers are inactive due to an inability to afford to buy, and interest rates will have to rise to cool the overheated housing market.

and consider this – December 2006: despite median house prices growing by over 9% in 2006, the market is overheated heading into 2007, interest rates will rise and next year will be bad for New Zealand property investment…

Yeah, it’s been the same story for two years in a row.Apparently the New Zealand property market has reached the point where it is overvalued and where market movement is now restricted because no one can afford to move or enter the market.

But what about the fact that month after month, year after year, prices keep going up? Although at a much slower rate than just a few years ago, they are still going up… and the reasons they are going up include the fact that demand is still high across the country, there is an annual internal migration of professionals and wealthy international expatriates seeking employment and citizenship in New Zealand bringing new money and interest to the market, and the number of tourists to New Zealand is growing unabated.

All of these factors and more will mean that in 2007 the New Zealand property market can and will bring returns to an investor in terms of rental yields and underlying price growth, and that in the long term the New Zealand residential market is a great place to be. to invest.

The only potential fly in the ointment is the fact that the Reserve Bank of New Zealand is again considering raising interest rates in a bid to slow down the housing market, reduce speculation and reduce inflation, and this risk is real. and could lead to a slowdown in the market after 2007.

But a market slowdown does not eliminate an investor’s ability to profit! The key to making a profit in New Zealand is to be clear from the outset about the investment approach an investor is taking. For example, a buy-to-let investor in the tourism market will look for a different type of property in a different area than an investor who prefers to buy shares in a promising area that is currently undervalued compared to its anticipated value when infrastructure or prospects employment have improved in the immediate vicinity.

Understand that there will be room for price expansion and strong demand for New Zealand property shares in 2007, but also understand that you need to think carefully about what you buy and where you buy and the investment approach you are trying to take.

In a weaker market like New Zealand, it’s harder to make a profit, but it’s certainly not impossible. Here are two examples of how to make a profit:-

Buy to resell: In Auckland, average property prices are currently in the region of NZD 446,000, but at the lower end of the market there is a new wave of interest from first-time buyers that is being fueled by a number of banks that have facilitated mortgage loans. criteria. This new consumer base provides the investor with a great opportunity. They may consider buying auction shares or the worst properties in a particular area where there is a definite reason to reside, such as transport links or a good school, and then renovating the properties and reselling them to the first-time buyers’ market.

Remember, target who your buyer is going to be, examine what their affordability constraints are and what they’ll be looking for for their budget, and then give them what they want.

Buy to Let – A very good alternative for an investor looking for property in New Zealand is to buy for the rental market and this alternative becomes more attractive in 2007 when Building Affairs Minister Clayton Cosgrove should have his comprehensive series of amendments legislation to previous enacted tenancy laws. His changes will make the entire rental market safer and fairer for both landlords and renters starting in 2007, so an investor can have even greater confidence in the rental market, which is already expanding rapidly due to the fact that there is an affordability issue that plagues many first time buyers. which means there is an increased demand for rental accommodation across the country.

Basically, New Zealand has a mature property market where benefits will continue to be realized if buyers looking to enter the market in 2007 take a hard look at what their target market wants and then make sure they are not buying over inflated stock in areas where demand and affordability are declining.