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Provincial property posed to prosper

Provincial areas look set to prosper in the property market over the next two years, with the export led economy helping economic prospects according to the QBE LMI 2010 Housing Outlook Report.

Thursday, August 12th 2010, 2:00PM

by Jenha White

Taranaki,/Manawatu/ Wanganui and Otago/Southland are expected to do the best with good economic prospects.

Infometrics director Gareth Kiernan says in the last five or six years Taranaki has been doing well in oil and dairy with no signs of that changing in the near term.

Manawatu is successful with education through Massey University based in Palmerston North and it has also been doing well with meat prices. It is has also seen a big improvement in population growth wih a 23% fall in the number of people leaving the area last year.

Otago and Southland are successful with dairy and coastal Otago has seen a big improvement in population, attracting the most international immigrants in seven years as well as experiencing a sizeable drop in the number of people heading overseas.

Kiernan says the outlook for provincial areas is the best it has seen since it started doing Housing Outlook reports.

He also looked at how tax policy changes will impact on the housing market, saying they will be a contributing factor in the forecast reduction in house prices of 4.1% by June 2011

Kiernan says tax changes took momentum out of the housing market in late 2009 and early 2010.

He believes that alongside interest rates, net migration and lack of a convincing economic recovery so far have kept buyers cautious.

Infometrics forecasts that tax policy will knock 13% off house prices compared with no change.

Kiernan says overvaluation of housing with prices currently 20% above the long term trend will also be a major impediment to further house price rises.

Overall, the message was that the outlook for incomes, economic growth and population growth suggests provincial areas may fare the best in the property market over the next two years.

 

 

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 5.79 5.49 5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 5.79 5.49 5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance 7.90 - - -
Basecorp Finance ▼8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 ▼5.79 ▼5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 5.79 5.59 5.69
Co-operative Bank - Standard 6.95 6.29 6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.99 5.89 -
First Credit Union Standard ▼7.69 6.69 6.39 -
Heartland Bank - Online 6.99 ▼5.49 ▼5.39 ▼5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 6.65 6.40 -
ICBC 7.49 5.79 5.59 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 ▼6.69 ▼6.49 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 ▼5.79 ▼5.59 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 7.94 ▼5.75 ▼5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.49 6.95 6.29 6.29
SBS Bank Special - ▼5.89 ▼5.49 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 ▼4.89 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.19 6.49 ▼6.39 ▼6.39
TSB Special 7.39 5.69 ▼5.59 ▼5.59
Unity 7.64 ▼5.79 ▼5.55 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society ▼7.70 ▼5.95 ▼5.75 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 5.79 5.49 5.59
Median 7.49 5.84 5.75 5.69

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