It is not easy to buy a house in New Zealand



Unbelievable land fever in New Zealand: It took 10 months to meet more than 100 different people to be able to close the contract. Viewing up to 60 houses and getting rejected from the contract 10 times before successfully purchasing the desired property.

It is report that the good anti-epidemic is making the New Zealand real estate market hotter than ever.  Even many brokers here have to use the word "disastrous" to talk about the competition for home trading contracts.

It is not easy to buy a house in New ZealandIt is not easy to buy a house in New Zealand / ph: pexels

Even the war to buy real estate in New Zealand forced buyers to increase the original amount of home buying 4 times to 700,000 New Zealand Dollar (NZD), equivalent to 493,000 USD to complete the contract.

During a 10-month period, a buyer had to increase the home purchase amount by 150,000 NZD.  

This is not difficult to understand.  Data from the Organization for Economic Co-operation and Development (OECD) show that New Zealand is currently one of the hottest real estate markets in the world thanks to its effective anti-epidemic.

 Similarly, a report by consulting firm Demographia shows that Auckland city, home to 1/3 of the population of New Zealand is currently the most difficult place to buy a home in the world.

 The hot growth of the New Zealand real estate market has caused many people to worry about a new bubble like the 2008 crisis. House prices here have risen more than 20% in the past year to February 2021,  an average of 780,000 NZD per contract.  In crowded cities like Auckland, the average price is up to 1.1 million NZD.

 Consequences of the policy

 The government's loosening monetary policy to stimulate the economy after the pandemic also contributed to lowering interest rates to record lows and pushing cash flow to investment channels such as real estate, thereby causing house price soaring.

 It is report that not only New Zealand, but this trend is happening globally when governments stimulate the economy after the epidemic, but good anti-epidemic countries like "kiwi country" is the hottest price increase market.

 Even New Zealand house prices went up on a weekly basis and broke many records.  In March 2021, a minimum 3 bedroom Auckland house cost around 5.98 million NZD, up to 2.6 million NZD higher than the local council's estimated price.

More surprisingly, a shabby bungalow in Auckland in January 2021 also cost up to 1.81 million NZD, surprising many brokers.

The rapid growth of the real estate market is putting great pressure on Prime Minister Jacinda Ardern as she is already a person against rich and poor inequality.

 The home ownership rate in New Zealand has dropped to a record low of 65% since the 1950s. This is a rare occurrence when house ownership culture has become an inherent feature of this sparsely populated country.

 Much worsen,  the wealth of New Zealand homeowners is 14 times richer than those who have to rent, reflecting the growing gap between rich and poor.

 The Infometrics study found that the average house price is currently 6.7 times higher than the average household income in New Zealand.  In order to bring prices back into balance, house prices need to be reduced by 55% or the average household income must be increased by 123%.

It is not easy to buy a house in New Zealand

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