All the signs are pointing in the right direction.
Just released this morning the BNZ’s latest confidence survey. A net 34% of over 400 respondents expect the NZ economy to improve over the coming year. This is up from a net 27% in March and a net 2% in November expecting that things would get worse.
There continue to be signs of improvement in residential real estate, manufacturing looks to be in reasonable shape, and agriculture is good though there is caution regarding the next season’s dairy payout.
A nationwide shortage of residential properties for lease has led rental prices higher in many places across the country and there’s no respite in sight, as shown by First National’s quarterly property management survey.
Rents have increased due to a shortage of rental properties across much of the nation – it’s the basic economic principle of supply and demand. The situation is unlikely to improve until more properties are available to rent.
Next month law changes mean depreciation can no longer be claimed on investment properties. This has had a cumulative effect of making it difficult for new landlords to enter the market and for existing investors to grow their property portfolio, while keeping reluctant landlords in a holding pattern because they would have to pay back the depreciation if they sell.
There’s a gradual creep towards more people renting versus owning a home as people can’t afford to buy.