Migration falling, house prices to follow?
The analysts at Statistics New Zealand, have announced our annual net migration figures. In the year to September 2017, 72,000 people started calling New Zealand home, but in the next year to September 2018, there were only 63,000. The drop is part of a gradual drift from record immigration. So, how does it impact home loans, real estate and all that jazz?
Two words: Supply and Demand.
If you have a big supply of something (housing) and a decreasing demand for it (less people needing a place), then the price of the ‘something’ goes down. This iron law lies at the heart of housing economics—in fact, at the core of economic theory. As the ‘supply’ of immigrants goes down, ‘demand’ for housing falls away and prices should follow. Well that’s the theory… time will tell.
Another reason for the drop in demand, is the fact that New Zealanders are heading across the ditch to look for work. Many believe Oz offers better prospects right now.
Want to learn more about supply and demand or get some help with a loan? Drop me a line.