By Graham Goodisson

There’s been plenty of noise about property prices and their impending crash/collapse/drop/bubble burst. Despite luring you in with the above title, I should preface this with a “never say never”, but I doubt very much that we are going to see big price drops in the future.

When times are tough, Kiwis don't tend to sell. We tend to hold on and grind it out.

Yes, interest rates are going to increase. Yes, our mortgage payments are going to go up. Yes, there is inflationary pressure. Yes, there are not enough houses on the market. Yes, there are not enough houses being built. Yes, it is tougher for first-home buyers. Yes, we have a labour supply issue. Yes, that will put pressure on wages. Yes, banks are still lending. Yes, they are analysing incomes with more intensity.

I do think house prices increases will slow. But that is not the same as dropping.

Kiwis will still buy investment properties.Kiwis want to put their investment funds somewhere and in spite of Government rhetoric and tax policy change, I predict investment property will still be the investment vehicle of choice here in New Zealand.

There are just not enough houses on the market to create pressure on prices (certainly in Wellington). And if price rises continue to slow down then that will again slow the number of properties being listed.

Should you be cautious with your budgeting when thinking about the next 24 months? Absolutely. Is it a good idea to look at investing in asset classes outside of property? Absolutely. Is there going to be a big correction in house prices? No!

I would welcome debate around this point.

Graham Goodisson(FSP95428) is a Financial Adviser with Velocity Financial (FSP95466). No investment decision should be taken based on the information in this blog alone. A disclosure statement is available here on our website.

Click here to learn more about Graham and how he can help get you to where you want to be.

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