There has been a recent surge in property prices in Australia and New Zealand, in particular Sydney and Auckland. Not surprising that these are higher-density cities with housing shortage and high immigration rates.
In Sydney, high-rise living is beginning to take off with developers looking for land to build upwards. Multi-unit properties have multiplied over the past year, with approvals for high-rise residential developments rising by 28 per cent. The increased supply of homes these properties will eventually provide may bring home prices down slightly but for now, they are sky high.
Some home owners whose combined land area come up to at least 4,000 sqm, have even banded together to sell their homes collectively to developers at premium prices. For example, a single standalone brick house could fetch around $1million in the suburbs, but when sold collectively with 3 to 4 other homes, they could command $21 million which means at least $4 million per house. There are fears however that the country could be entering a property market bubble, which could prove dangerous for their banking system.
Over in New Zealand, lowered interest rates and official cash rates set by the Reserve Bank of New Zealand (RBNZ) has fuelled housing demand and more buyers are now investors, making up 41 per cent of all housing purchases. The New Zealand government is looking at ramping up housing supply to help relieve some of the pressure on the housing market.
