After dramatic falls in prices over 2008, New Zealand's housing market is poised to rebound strongly over 2010 according to QBE LMI New Zealand Residential Property Overview report.
House prices could grow as much as 11% thanks to low interest rates and housing shortage. Over the next three years, house prices are forecast to surge by 24%. Median house price is currently sitting around $330,000.
Properties are also taking shorter amount of time to sell with the median time on the market dropping to 41 days in June 2009 from 58 days in July last year.
"Housing affordability has improved on a national level and the level of demand amongst buyers has increased. With improved credit conditions and record low interest rates, the motivation for first homebuyers and investors to enter the market has never been compelling," said QBE LMI CEO Ian Graham.
He noted that due to the lack of available finance for developers, significant shortage of housing is emerging in New Zealand and is expected to continue into 2010.
"The underlying demand for new houses is sitting at 21,000 per year which is strongly driven by an increase in migration and a reduction in New Zealanders moving overseas. This undersupply of new dwellings will contribute to an increase in property prices over the next three years," he said.
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