FEATURE THE YEAR AHEAD
SUE HARRISON
PRESIDENT NEW ZEALAND PROPERTY INVESTORS’ FEDERATION
While the signs are good for a better housing market this year, it will still be difficult for investors because interest rates will remain high and possibly increase into next year. House prices will also rise.
One of the biggest house price boosters is immigration. People have to live somewhere and when there is a restricted supply of rentals, demand and rents go up … and house prices increase. It’s the inevitable outcome of housing supply dropping.
What is really being underestimated is what effect the impact of climate change will have on housing and what, as a country, we are doing about it.
No-one has got a grip on the number of people who will have to leave Pacific Islands for other countries, such as New Zealand, when rising sea levels make their homes and country uninhabitable. It’s already happening.
What is this going to do to housing demand in NZ and how long can the country stop the immigration of people who can’t live on their island homes?
The future of the housing market is undoubtedly going to be climate influenced. People are moving around, making choices about where in the future it’s wise to own homes and investment grade properties. NZ needs to be well placed for what is coming in terms of climate change and it’s a major issue no-one is really confronting apart from insurance companies and some councils.
Insurance companies have already signalled they are not going to insure many coastal properties or those on floodplains in the future.
The price of insurance will massively influence where people have investment properties and by and large they are not going to be those where insurance
