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In response to TV3’s Firstline bulletin this morning, CEO of New Zealand’s largest real estate company Hayden Duncan says although banks might be making it easier for buyers of real estate there are other factors contributing to this ‘housing recovery’ other than low interest rates.
“Lower interest rates are giving buyers financial respite, which is welcome, however it is not the sole stimulant driving real estate volume increases.”
“These increases in volumes need to be put into context as they were unavoidable given the fifteen year lows that the real estate market is currently coming out of.”
“Now a combination of a solid economic platform - with projected growth in the economy – is driving business confidence along and the rural sector, in the best shape it’s been for 5 years, are amongst the main drivers of household confidence.”
“There is a pent up demand for housing which undoubtedly creates an unsustainable level of demand vs. supply, growth and activity, says Mr Duncan,“ but the sweeping generalisations of a flying real estate market are unfair on most markets outside of Auckland and Christchurch. Provincial markets like Wellington, Hamilton and the Bay of Plenty are still not seeing the increased activity that Auckland and Christchurch are seeing but growth is evident, as in mentioned in the MarketWatch for June 2012.”
So as low interest rates prompt buyers to be active, and sellers to list Harcourts say they are seeing people out to sensibly buy property having learnt lessons from 2007. In context of the whole economic picture, many factors make the decision to buy property a good one.