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Auckland, New Zealand

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The canary in the coalmine?

The stage is set for Auckland's central city apartments to fall in value by up to 40% over the next few years with prices already falling amid an oversupply, according to a property analyst.

Kieran Trass, who's also a director of investment mortgage brokers Hybrid Group says buying into Auckland's CBD apartment market now is equivalent to catching a falling knife.

"Now may look like a great time to buy into this distressed market as apartments can be bought at prices much lower than their inflated asking prices, but caution in any distressed market is wise."
The number of apartments in the CBD has nearly doubled from that of just two years ago to over 12,000, with another 4,000 under construction and another 3,000 planned in the next few years, Trass says.

Auckland Apartments

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An interesting point to be made here is that since the Australian market peaked there has been massive advertising of Auckland 'executive rental apartments' (I.e. cookie cutter 2-bed 1-carspace tower block flats) in the Sydney Sunday papers, obviously aimed at investors. 8% yield IIRC, and prices looked very cheap by Australian standards (but not, perhaps, by NZ standards :P ).

The other point being stressed in the ads was that NZ doesn't have capital gains tax!! Firstly, that doesn't seem to be an issue any more based on the first post. Secondly, if CGT is treated the same as income Australian resident taxpayers would still be liable for Australian CGT on gains made disposing of assets in NZ (or anywhere else for that matter).

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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