Auckland, New Zealand’s Real Estate Is The Most Expensive In The World
You thought you paid a lot for your studio? You should try New Zealand.
Here’s one we didn’t see coming. Guess which country has the fastest growing real estate market in the world (OK, pretend you didn’t read the headline)? No, not the USA or China or UAE. It’s New Zealand. Who knew? Auckland’s property market has been in blast off mode for some time now with no sign of it re-entering the atmosphere. Prices there are now outstripping those in London with 11% annual growth according to UK based real estate agents Knight Frank. The average price of an Auckland home is around NZ$1,013,632 or $750,000. How did this happen?
Well, Auckland is a global city with a diverse population, and the jobs are all there. It has a vibrant tech sector which has grown by 80% in the last decade. In addition, manufacturing, financial services, health and hospitality are buoyant. Geographically it’s quite stunning—volcanic hills, twin harbors, bays, beaches and islands. That means you can work and play all within close proximity of one another.
Such has been the draw, that immigration to New Zealand generally is at a record high (69,000 in the year to July), meaning there isn’t enough accommodation to go round. Foreign investors have been quick to jump into the Auckland property market, particularly the Chinese. According to Core Logic in 2012, 37 percent of buyers were investors and today that number is at 50 percent.
The competition for space is now so intense that social housing tenants are being paid the equivalent of $3500 to leave Auckland and settle in other areas. The property boom has tipped over into a crisis. In a recent survey, every garage in the South Auckland area had someone living in it. Homelessness has reached an all-time high. Many people with good jobs just can’t afford to buy in Auckland and are considering moving out.
New Zealand, with it beautiful scenery, jobs, Asia/Pacific connectivity and English language is a popular place for many Britons to emigrate. With the Brexit vote on June 23rd more than 10,000 British nationals registered their interest compared with less than half that number the previous year. In light of the supply and demand, New Zealand’s central bank now requires investors to put down 40 percent down payment.
Second to New Zealand in global real estate price growth was Canada with 10 percent or more over the past year. It also recorded the fastest price rises of any country over the past three months.
And you thought buying a place in New York was tough.
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