Despite fears of a property slowdown, New Zealand’s strong economy will help to keep house prices steady by attracting migrants and keeping Kiwis here, says KPMG.
House hunters will be wanting the current property cycle to slow or reverse after its great run over the past few years.
“However, market data is mixed, and while it does show a definite slowdown compared to previous years’ growth, explicit major declines are not yet clearly discernible,” KPMG said in the commentary to its latest Financial Institutions Performance survey.
Auckland property prices in the 12 months to August rose by 2.8% – the slowest growth rate in six years QV’s latest data shows
KPMG said steadily increasing floating rates on new mortgages might be contributing to a cooling demand from house buyers.
Loan-to-value restrictions in New Zealand and rules in China restricting the flow of money overseas had also played a part.
“However, fundamental factors bolstering the market are expected to persist over the short to medium term. For instance, New Zealand’s relatively prosperous economy amongst the advanced economies continues to attract migrants and deters Kiwis from emigrating or encourages them to return, thereby supporting demand,” KPMG said.
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