Every human being need a house to live in, this is basic life. However, house market is always popular. Also house market is very changeable.The property market has been changing dramatically in the last ten years, there are many factors that have affected the property market. The changes in the property market is not what we can foresee, but there are some regulations to it.
The first factor that has affected the property market are the government's regulations. From May this year the government will change the depreciation tax claiming (NordqvistApril15th2010), this means more investors would hesitate to put money in the house market, also banks have been restricting their lending criteria, the lending percentage has to be lower than 80% for a householder due to the big crisis in 2007, comparing the last year same time, home loan approval dropped 25.2%.A quite funny example now even you have $400,000 deposit for house value $500,000, you still need get proof that you can afford $100,000 loan(TapaleaoApril13th2010). Therefore, the government's regulation and the lending policy of banks effected the house market, there were not so many buyers as much as there were in 2005.The second factor is recession, as we all know that recession is an international issue that has affected the global economy for more than two years. Property market was affected too. It went down dramatically after 2007, many people lost their jobs or has been bankrupted. Many houses in auction were put for mortgagee sale instead as they were too hard to sell. This year, the economy is recovering from recession as while as the housing market. Statistics in March shows that this month has the best sale for the housing market since June 2007 ( April 8, Nz hereald). Housing price today rose up to 11 percent since March2009.
March was a significant month for the house market, as it rose dramatically. It has risen $709 in just one day (Anne2010) that is incredible. That was the highest price achieved in the last twenty years((April16,2010NZherald)). As we all know for the housing market has seven years considered for one period, this year is the peak year in the period we are in now and the peak for the last period was 2003. After so many years of low prices. It is time for the property market to recover again.
Third factor is that property market has their seasonal changes as well. Last month sales of property has fallen by 27.6% , prices of properties has dropped less than 1 percent and there were not many houses on the market as much as there were in March (May5th NZHerald). This shows that the housing market is recovering overall, but normally during winter time the sale would go down for many reasons. Such as people don't like moving during winter time, also winter is not a really good season for open homes due to coldness and darkness.
Fourth factor is that property market is affected by locals too. Different area has different price change in their house market. Survey from Quotable Value New Zealand shows that six suburbs from Northshore are fast growing area including: Sunnynook, Chatwood, Forrest Hill, Torata Vale, Glenfield and Hillscrest. There has been a 20 percent increase for the housing price in these above areas (Nordqvist April12,2010). This is a good sign for people living on the North Shore, also this figure gives us a sign and tells us that the house market is still rising up. There are logical reasons to explain why the housing prices rise fast for those particular suburb. First factor would be that houses in those areas have a easy access to the motorway and large shopping centers, so it is convenient for people living in those houses, second factor would be that these houses are easy to afford, especially for first home buyer and finally North Shore is a desirable place for lots of kiwis as it has a great living environment and people are very friendly in the communities. (NordqvistApril12,2010). However there has been some prices drop down in suburbs such as Ruapehu District where the price has fallen 11.9 percent (NordqvistApril12,2010).
Fifth factor is relating on China market, as we know that there are so many float in Chinese house market(Hickey,2010) that affect the New Zealand Market as many Chinese people invest their money in New Zealand property. This factor push New Zealand property market to the different way. Especially, some Chinese people do not know much about New Zealand house market, they only want to buy house for good school zone and luxury lifestyle, they don't care much about money that they made it easy from China. This factor really affects the property market in New Zealand.
Finally, there are many other factors effect market as well. Since we know that recession finished and economy of New Zealand is recovering now,therefore many people put their houses in the market in March. There are more than 14,000 listings in March(NordqvistApril01,2010) and this brought the number of unsold rising. However, this is the buyer market now. Also this factor is helping the house market to recover.
Now winter is coming and house market becoming quiet,but price still rise. However this is good sign for house market, also good sign for investors and first home buyer. Government still have some policies to help first home buyers. All these will help New Zealand property market to enter another high peak.
In general, house market is unpredictable, there are so many unstable factors, everyone need enter with caution and some knowledge of property.But also house market is interesting, there are so many things to gain and to lose. Especially in this dramatically world and changeable society.
References:
Auckland house sale dip last month, price rise May5, 2010.Retrieved by 06May2010 from:
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10642883
Bernard Hickey: Bubbles float from China April18,2010 Retrieved byMay9th,2010 from
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10639027
Experts:Banks more willing to lend on mortgages
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10638029
Busy month for Auckland house sales bucks national trend April8,2010
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10636973
Gibson Anne(2010).Booming Auckland house sales jump $709 each day, April17, 2010. Retrieved by 06/05/10 from
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10638874
House prices on the up and up April16,2010, Retrieved by 07/05/2010 from
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10638776
Nordqvist Susie(2010), Home loan approvals take record tumble. Retrieved by 15th April2010 from
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10638634
Nordqvist Susie(2010),Property gult creating buyers' market, April01,2010 Retrieved by May9th2010
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10635819
Nordqvist Susie(2010), NZ's best and worst suburbs revealed April12,2010 Retrieved by May6th 2010 from
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10637890
Tapaleao Vaimoana(2010), House mortgage market drying up April13,2010 Retrieved by May9th 2010 from:http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10638727
