Boom towns in for price shock
Kaikoura is the most overvalued town in the country, but it will also suffer the most as house prices there are predicted to slide up to 9 per cent in the next year.
Monday, May 23rd 2005, 4:18AM
by The Landlord
Research from economic forecasting firm Infometrics reveals New Zealand house prices will slip an average 0.8 per cent over the next year and about 5 per cent over the next two years.Kaikoura and the Queenstown Lakes District are likely to bear the brunt of the slowdown and drop 9 per cent by June next year.
Infometrics senior economist Andrew Gawith said the long-term forecast would be a nasty surprise to those who had recently bought a new home. "But it pales into significance for the average homeowner who is wallowing in a 60 per cent capital gain since 2001."
The figures are less dramatic than those forecast in last November's Infometrics/PMI six-monthly report, which predicted a 4 per cent national slide this year. The latest analysis concedes the slowdown is still to come - but has also revealed how overvalued some of New Zealand's land has become.
Property prices in Kaikoura - most famous for its whale watching - are 82 per cent above a long-term property trend line which dates back 80 years.
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