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What investors can expect from Northland’s property market in the second half of 2019

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What investors can expect from Northland’s property market in the second half of 2019 – your questions answered

As leaders in rental property management in Northland, Rentals.co has a mission to let property investors know what’s coming, when is a great time to buy, and whether rental yield is likely to give a reliable return on the money you hand over to make your brick and mortar property investment.

Remember, we’re available at 09 459 7139 / info@rentalexperts.co.nz when you want rental property management advice.

We’d like to thank CoreLogic for their observations and predictions which helped inform the following…

q

In the second half of 2019, can property investors expect sales to surge, slump or something in-between?

a

Average values are growing in a restrained fashion and residential property sales activity looks set to tick along at the same controlled pace in the second half of the year as it has in the first.

q

Is any part of property investment getting more expensive?

a

Two key factors to watch are policy decisions from the Reserve Bank (rules around loan to value ratio) and any buildings insurance premiums changing (there was a major shift in buildings insurance premiums mid-year)

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Graph – credit CoreLogic

Good news on property investment in Northland:

  • Rental yields to continue to rise (albeit from a low base), as rental growth continues at a steady pace of about 5% annually, and above the growth in average property values. This will be welcome news for investors, who are facing tax ring-fence for losses) – and investors don’t have to worry about capital gains tax anymore.
  • Average property values still rising but in a restrained fashion, with the more affordable towns and cities in ‘regional NZ’ likely to record the largest increases in value
  • We can expect loosening of the LVR rules in November, reflecting our expectation of steady market conditions. Possible options include lowering the owner-occupier deposit requirement from 20% to 15% and/or raising the investor speed limit for high LVR lending from 5% to 10%.
  • We can expect banking sector competition to remain intense and ‘rate wars’ to be a recurring theme. This will be the case regardless of whether or not the Reserve Bank cuts the official cash rate again.