New Zealand Winter Home Update #3
10 July, 2005
Many thanks to the readers who completed our second survey. If you haven't done so, you're welcome to add your feedback and comments to those already received from other readers. Simply click to the survey and send in your thoughts.
I've written up a page of analysis that you might find interesting. Hopefully most interesting of all is the conclusion this all leads to - an 'out of the box' approach to creating affordable NZ Winter Homes. See the analysis page for more details.
Have you considered our NZ Tour in October? The tour became 'guaranteed' this weekend, and with more than the minimum number needed now signed up, will definitely proceed. Even better, reflecting the weaker NZ dollar, the price dropped slightly, too. So you can go ahead and confidently book the discounted Qantas $798 fares to Auckland - the last day to take advantage of this is Monday 11th. That is how I'll be traveling down, myself.
I'm also staying on in Hawkes Bay for a while after the tour officially ends, so if you don't want to take the entire tour, but are interested in the Winter Home project, why not come down for the final part of the tour and/or some time immediately afterwards.
The New Zealand dollar has been steadily weakening this last week, and is now at its lowest rate in a year. This of course makes NZ housing prices more affordable. Who knows what the future trend will be, but we'll take all good news, as it occurs, without question or complaint!
The NZ economy, longer term, continues to hold more promise than peril. The OECD released a report just over a week ago, predicting annual GDP growth of between 3.25% and 3.5% through 2010. NZ economists Infometrics also said they project a 3% annual growth rate for the next five years, a projection largely in line with the OECD. And, of greatest interest to us, Infometrics said that house prices will slow down rather than reverse direction, with a sharp drop-off in new housing construction acting to keep demand and pricing steady.
Here's a recent article in the NZ Herald that discusses the OECD report and a more negative report from a local NZ bank, Westpac.
I was hoping to buy a NZ property for myself last week. The current owner bought it on 22 Feb, 2003 for NZ$288,000. It was a lovely property with a three bedroom, two bathroom 'cottage' (1930s construction) in good order and recently renovated. French doors from the living room opened out onto a gorgeous garden with a good measure of privacy, in a great location.
Unbeknownst to me, and since I last saw the property in October, he has now split the 11,000 sq ft (ie almost a quarter acre) lot in two, replacing the lovely garden with a second house, leaving the original house with very little land and destroying its privacy and ambience. What had been a lovely living environment has become a cramped little lot.
But, for the house and half the land he bought not quite two and a half years ago, he is now hoping to get NZ$470,000! He is more than doubling his money.
I cite this example not to suggest such profit taking opportunities may be open to us all in the future (they almost certainly will not be) but to highlight the extraordinary appreciation in values that has occurred over the last few years.
To sum up the various issues in this newsletter - dropping exchange rates, good economy, and massive recent property appreciation, the best time to get into any real estate, anywhere, is always 'as soon as possible'. Sure, short term blips of one sort or another may distort things, but in the medium and long term, good appreciation seems to be the reliable expectation.
There's never a perfect time to invest in property, but this simply means to jump into the market now, rather than waiting for some conjunction of circumstances in the future which probably will not be apparent until too late.
I hope to see you in New Zealand - if not in October, then when we become neighbors
David M Rowell aka The Travel Insider
If you ever wish to unsubscribe, simply reply to this email and set the subject line to say 'remove'.