We don’t think so – check out building costs and see if you think there is any profit in a new build? 57% increase in building costs these last 10 years, section costs increased 110%, house prices only 105%.
We are expecting discerning home buyers to find their new home in the existing house market – and those stock levels are low.
January brings a buoyant rental market so many vendors not achieving their desired market return will opt to lock in a healthy rental return for the next 12 months.
BNZ Economist Tony Alexander points out our employment rate is not high, the worst recession since 1930’s has only managed a price reduction of 11%, household debt has declined from 14.3% 2008 to 9.4% 2011, our fiscal measures do not encourage mortgages sales since the debtor still “owes”. Debt is down, deposits are up and the Christchurch rebuild will likely increase new build costs. Don’t expect “buying” 10 minutes from the Capital City to bring “bargains” any time soon.
Our advice; look carefully at the stock coming on and more importantly at the longer listed properties – make a positive decision soon because stock numbers will drop as Easter approaches.