Soaring residential investment statistics are indicative of growing confidence in the market, says the president of the Auckland Property Investors Association.
Statistics NZ said that in the March 2013 year, investment in fixed assets was $41.8 billion, a level not seen since 2008.
"The main driver was investment in residential buildings, which rose $2.0 billion in the March 2013 year," acting national accounts manager Steffi Schuster said. "This is the largest year-on-year increase since this series began and is the first significant increase in residential building investment since 2008."
APIA president David Whitburn said more investors had come out of the woodwork over the past year. “Some people were wondering earlier whether it was really a boom.”
He said that had passed and most people accepted Auckland in particular was engaged in a fully entrenched property boom. Property was also appealing to people who could not find good returns in a low-interest environment.
Many people were making good money out of buying properties off the plans, he said. “It’s a safe time to go off the plans and it will be gain next year. It won’t be for a couple of years that I would be questioning.”
Other commentators said it was also a good option for people who did not have a 20% deposit. They could pay a 10% deposit to secure a property at current prices and then save up another 10% before the time came to get a loan and purchase the property.
Whitburn said he expected price growth in Auckland to slow to 9% or 10% next year, from the 14% reported this year. But he said increasing migration could push prices up further. Statistics last week showed that people were returning from Australia in greater numbers, and not moving across the Tasman as frequently.