Property prices continue to rise in Auckland despite increasing concerns about affordability. There are many factors at play and, in combination, they are creating what some are describing as an overheated market. However, when it comes to any form of investment you need to take the long view….
Latest property values are lifting according to QV.co.nz and the indications are the Auckland market is back into a positive vein. Not only is Auckland heating up but the whole New Zealand market is lifting.
While Money planners takes a long term view in the property market with an average net growth of 4.5% it is interesting to note that in the last 12 months the QV statistics show the New Zealand market has risen by 12.4%.
When investing in property it is essential to take a long-term view and Moneyplanners Ltd recommend that your windows for holding a property should be a minimum of seven years ideally at least 10 years so you experience not only the highs but the lows that can happen when investing in property and as a long-term gain.
Clients are asking have they left it too late to invest in the property market my response is no.
While the best time to buy property is always now if you can afford it, most clients do not need to realise short-term gains in their investment property for retirement planning. Their gains in property are required in the long term if you are looking at retirement planning and can be a minimum of 10 years up to 20 years plus in retirement. So if you can afford to buy an investment property without undue strain on your personal finances now is the time to do it.
My favorite location for investment property ranges from Wellsford to Hamilton, but possibly we should look to add Tauranga to that mix especially for those that find the $700,000 to $800,000 figure to purchase in the Auckland area too high for them to support without affecting their personal lifestyles.
The QV figures show Tauranga has grown 12.6% over the last 12 months with an average market value of $592,000 and indications are that this growth has come from non-Auckland investors.
Another market worth considering is Whangarei where rental properties are proving hard to find and demand is strong. In the long term Auckland may need to look to move its deep water port and the obvious answer is for development of Marsden Point which will create a demand for rental properties.
Please get in touch if you’d like more information or would like to discuss your own personal investment planning needs.