Nz prices to bounce back in ‘09

Property sales in New Zealand will pick up in 2009 after the worst 12 months for 20 years because life has to go on, it is claimed...

Property investors this year can expect a return to the days of positive cash returns for the first time in more than five years, according to market watchers.

As interest rates fall and house prices are tipped to slide another five to eight per cent there will be an increase in listings said Alistair Helm, Chief Executive of realestate.co.nz.

He revealed that sales were 50 per cent down on 2007, the lowest for two decades but he predicts home owners who have been sitting tight will decide they must push on after a big think over the Christmas holidays.

They will accept the need to take a drop in price, so they can move for jobs or lifestyle reasons, or try for that bigger, or smaller, house in that nice suburb that's on the market for a good price,' he said.

And among this year's fresh crop of sellers will be the new breed of 'reluctant landlords', said Kent Leicester, Director of property investor trading website Property Billboard and investment strategy company Polaris Group.

'A lot of people who held out last year will by February, March or April have had enough of being a landlord and decide to sell. And there's a whole run of mortgagee sales to come,' he predicted.

There will be 'exceptional buying' for investors who've been sitting on equity, he added and he expects that the property market will stabilise in the late third or the fourth quarter of the year. He advises buying in suburbs where the average house price is £135,000 or lower.

Tanya Kwasza, Director of property investment company Catalyst2, said certain kinds of property should be avoided even if they appear to be a bargain price.

She recommends avoiding vacant land, second homes, beach houses and coastal properties, unproductive farms, second-class properties, such as high-maintenance or leaky buildings, or those with weak tenants.

Instead, look for positive cash flow properties in prime locations, under £193,000 and mid-range value, new or near-new properties with multiple income streams and properties with secure tenancies.

Source: www.propertywire.com