There is nothing consistent about the property market. But that can be considered as a good and bad thing. The property market under the real estate industry is one of the most common investment options here in New Zealand.
When entering the market, as a buyer or a seller, you need to be aware of the different factors that impact the cycle. Here are the top factors highly affecting the property market.
Laws and Restrictions
Laws and restrictions implemented by the government are mostly done to address particular issues. These laws may benefit buyers or lenders. For example, a government implements stricter lending restrictions. This will benefit lenders or banks but not property buyers who are planning to get a home loan.
The government can then loosen those restrictions to give the ball back to the buyers. One good example of this is Australia’s cash rate. Since October 2019, the Reserve Bank of Australia cut down the cash rate to .75%. This means lower monthly repayments for people.
Infrastructure projects make an area more desirable because it improves liveability and quality of life. However, that is not all, these projects are meant for different purposes. Some projects are mainly for transportation.
Some projects improve community interactions and congestion. New hotels and resorts are considered to be infrastructure to improve accommodation and tourism in a particular area.
A city with several planned, on-going and completed projects is highly desirable. Properties in a highly urbanised area tend to be more expensive. Why is that? Living in these areas with improving liveability tend to attract more investors.
Auckland is one of the most desirable cities in New Zealand. The city offers several services, business opportunities and at the same time leisure precincts. These projects also attract international investors to do business. That will then result in more jobs being created.
This is a big one and will greatly impact the property market negatively. One of the most recent instances is the COVID-19 outbreak. The pandemic resulted in numerous fatalities all over the world. It also rendered most companies and businesses all over the globe to shut down.
The property market was particularly hit. Agents can’t push through with open houses, construction for residential developments were also stopped. The property market entirely seized from functioning.
That is why real estate companies and researchers are looking for ways to improve continuity in times like this.
The property market is not the only one taking a hit. A pandemic’s economic impacts are not contained in a particular country. All countries are affected and most of them come up with contingency plans on how to stay afloat.
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