{"id":406,"date":"2019-01-23T22:35:09","date_gmt":"2019-01-23T22:35:09","guid":{"rendered":"https:\/\/nestegginvestments.co.nz\/?p=406"},"modified":"2020-11-17T03:42:20","modified_gmt":"2020-11-17T03:42:20","slug":"auckland-residential-property-as-an-investment","status":"publish","type":"post","link":"https:\/\/nestegginvestments.co.nz\/index.php\/2019\/01\/23\/auckland-residential-property-as-an-investment\/","title":{"rendered":"Auckland residential property as an investment"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img loading=\"lazy\" decoding=\"async\" width=\"295\" height=\"213\" src=\"https:\/\/nestegginvestments.co.nz\/wp-content\/uploads\/2019\/01\/house-price-decline.gif\" alt=\"\" class=\"wp-image-408\"\/><\/figure><\/div>\n\n\n\n<p>I often end\nup discussing the merits of residential property as an investment with\nclients.&nbsp; As I am Auckland based, as are\nmost of my clients, this is usually specifically relating to Auckland\nresidential property.<\/p>\n\n\n\n<p>There is no\ndoubt that the Auckland housing market has seen spectacular growth over the\nlast 20 years.&nbsp; From 2001 to 2017 average\nhouse prices increased by around 170%, fuelled it would seem by a combination\nof rapid population growth and low interest rates.<\/p>\n\n\n\n<p>But Auckland\nhouse prices have plateaued.&nbsp; There has\nbeen little change from around September 2016 until now.<\/p>\n\n\n\n<p>In my view,\nthe major factor in the cessation of growth is that affordability limits have\nbeen reached.&nbsp; Houses have simply become\ntoo expensive for many prospective purchasers to afford.<\/p>\n\n\n\n<p>In\naddition, a raft of public policy changes have been introduced to alter the\ndemand\/supply balance or to improve affordability, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Auckland\nUnitary Plan rezoning<\/li><li>Special\nHousing Areas (National) and KiwiBuild (Labour)<\/li><li>Loan\nto value ratio restrictions<\/li><li>Foreign\nbuyer restrictions<\/li><\/ul>\n\n\n\n<p>And more are\ncoming:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Removal\nof ability to offset rental cash flow losses against other income<\/li><li>Capital\ngains tax changes<\/li><li>More\nfavourable terms and rights for tenants<\/li><\/ul>\n\n\n\n<p>A net\nresult of all this is that I am cautious about the short\/medium term prospects\nfor Auckland residential housing as an investment.&nbsp; My feeling is that the current flat housing\nmarket may continue for an extended period (perhaps many years), but there is\nalso potential for market declines due to the combined impacts of the above\npolicies, with additional risks if interest rates begin to rise.&nbsp; I\u2019ve heard a number of times that the Auckland\nhousing market will never fall, but I\u2019ve seen it first hand when I lived in\nLondon, and it is currently happening in Melbourne and Sydney.<\/p>\n\n\n\n<p>My\npreferred property investment is commercial property.&nbsp; Prospects for the sector are generally good, rental\nyields are significantly higher, it\u2019s an easy investment to access via property\ncompanies or property funds (which also provides diversification and liquidity).&nbsp; And finally commercial property is an\nexcellent defensive investment \u2013 often performing well when equity markets are\nstruggling.<\/p>\n\n\n\n<p>Dean Edwards<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>I often end up discussing the merits of residential property as an investment with clients.&nbsp; As I am Auckland based, as are most of my clients, this is usually specifically relating to Auckland residential property. There is no doubt that&hellip; <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-406","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"aioseo_notices":[],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/406","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/comments?post=406"}],"version-history":[{"count":3,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/406\/revisions"}],"predecessor-version":[{"id":410,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/406\/revisions\/410"}],"wp:attachment":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/media?parent=406"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/categories?post=406"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/tags?post=406"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}