PHOTO: SUPPLIED Tony Alexander says first-home buyers may be building their deposits quickly.
OPINION: History tells us that when recession comes along, people tend to get overly pessimistic about house prices and forget the supportive and insulating factors.
Here are a few which won’t stop prices easing off, but they will stem the magnitude of declines and set the scene for a recovery next year.
Note however, that from one location to another conditions will be different, and two big themes to keep in mind for the coming year are these.
First, tourism locations will suffer most of all because of four factors: The absence of foreign tourists and their only slow return one day, the moving out of many migrant workers and Kiwis, selling by business owners who need funds to support their businesses, and the absence of fresh buying by such people until our economy is in far better shape.
Second, investors will pull back to the cities from the regions. The likely removal of loan-to-value restrictions means they don’t need to go to the countryside to find properties for which their money adds up to at least a 30 per cent deposit. And, since 2016 Auckland has become less relatively over-priced, having seen prices on average rise 7 per cent versus 30 per cent across the rest of New Zealand.
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