With over 165,000 new migrants becoming NZ residents over the next year, there is expectation that demand will grow .
The One-off resident visa, which was announced by the government recently, is all set to provide up to 165,000 eligible migrants and their families with the certainty of New Zealand residence over the next year. It is the most generous entitlement to residency in NZ history.
However, the fact that some 165,000 people will most likely become NZ residents by next year is bound to have an impact on the country’s already overheated housing market. It may be noted that migrants without residency can't presently buy property in NZ.
Investing in property also has a cultural significance especially for Indians and it won't be an exaggeration to say that buying a house will be a priority for lthousands of Indian migrants after gaining their One-off residency.
Indian Weekender spoke to real estate experts to find out how the property market is expected to change once migrants who had been locked out of the market through not having residency will now enter it and whether it will increase pressure on the housing market as more people will be competing to purchase homes.
Renu Sharma of Ray White believes that the demand for houses will definitely increase with the One-off resident visas coming through because there will be an increase in the number of buyers with pre-approved finance entering the real estate market from 2022 onward.
She says, “There will be a lot of demand for houses. The prices are sure to keep going up, but it may not be as crazy as what we have experienced recently or in the past year. Most of these migrants have been in NZ for years but were just waiting for their residency before taking a plunge into the property market.”
She points out that Indians particularly like to play safe with their investments and for them, it is also a cultural thing to invest in real estate. “There is no denying that owning your own home in this country is one of the biggest achievements in terms of security as well as social status for any Indian immigrant,” she says.
Peter Thompson of Barfoot & Thompson is of a different opinion and maintains that though the One-off residency programme will see some impact on the housing market but not as large as many are thinking. He says, “Many of these people who will benefit from One-off residence are spread throughout the country so no one market is going to get the benefit. Secondly, many of these are on low incomes so will struggle to finance a property and some of those that want to invest may need to sell their homes overseas before they will be able to buy. For those who will be fortunate to buy a property will spread themselves where their work is based and that will increase sales for a short period but not affect prices in a big way."
Even though there will be an increase in demands of houses but experts feel that since lots of development is already happening across NZ and particularly in Auckland, this demand can be met to an extent.
VK Verma of Harcourts, says, “With a lot of development already happening in Auckland and a lot of development potential properties sold in 2021, we may be able to meet the increased demand to an extent. But at the same time, with the major banks imposing restrictions like LVR, debt to income ratio and increasing the mortgage interest rates, we may not see the property prices rising in the same proportion as it has in the last 12-18 months.
“However, it is almost impossible to predict the real estate market because there is umpteen number of factors, domestic and international, which affect the movement of the real estate market. My recommendation to first home buyers is to buy as soon as they can as the prices have never gone down when you compare the prices in terms of two decades. It is always better to pay your own mortgage than to pay your landlord's mortgage.”