2019 has been a flat year for the real estate market – but what the trends are for the New Zealand housing market in 2020?

What are the best New Zealand property investment strategy for 2020?

In this week’s blog, our guest expert in property investment, Gary Lin, shares his professional forecast on New Zealand housing market in 2020 and his property investment strategies, so that with the right mind-set and strategies, you can climb onto the property ladder and achieve financial freedom.

Gary Lin is a real estate investor and investment coach. He only owned one property in 2010, and then he started investing in house market, with 14 residential properties worth about $10 million in 2016. As one of the New Zealand’s leading real estate investor and educator, he has helped many dozens of investors getting onto the property ladder in New Zealand, and empowered others to live a life of financial freedom.

How to invest in New Zealand property market in the year of 2020?

Video Timeline

1. New Zealand property market forecast 2020 -- 02:15

2. New Zealand property investment strategies for 2020 -- 04:48

New Zealand real estate market market forecast 2020

“I expect 2020 to be a good year to invest in New Zealand real estate market.”

Here are the reasons why Gary expects 2020 would be a growing year for the real estate market.

At the start of 2019, New Zealand government planned to implement a Capital Gain Tax (CGT), which had an impact on the number of successful auction rate, dropping down to 20% (typically in Auckland area). When we look at the value of houses sold at that time, we didn’t see a good price.

In the middle of 2019, the CGT proposal was abandoned by the government. Meanwhile, the New Zealand Reserve Bank decreased OCR (Official Cash Rate), followed by the fixed-term mortgage rate dropping from 3.99% to 3.39% till the end of 2019. It was good news for real estate investors as 20% of cut in interests.

Boosted by the cancellation of CGT and the mortgage rates cut, the last few months of 2019 have started to show signs of an uplift, with successful auction rate increasing to 50% or 60% in Auckland.

Based on the 2019 state of New Zealand’s housing market, Gary expects 2020 to be a lifting year in New Zealand housing market and median house prices to rise by 5% or 10%.

New Zealand property investment strategies for 2020 

The record low interest rates have meant eased accessibility for more real estate investors. With increased borrowing power, some investors faced another question when they get their loan pre-approval from banks, they feel like flying blind with no ideas about where to invest and how to choose a right rental property.

If you are thinking about investing in the housing market, here are Gary’s proved property investment strategies in 2020:

Rule 1: Invest in the big cities in New Zealand, rather than in small towns.

Housing markets move in cycles and has ripple effect in small towns. The trend for properties in small towns are more volatile. We have seen a couple of good years in small towns, but only happened in very short years, and then followed by a stagnant stage in very long years.

Compared to invest in small towns, investing in big cities, such as Auckland, Hamilton, Tauranga, Christchurch and Wellington will bring you more solid capital growth.

Ruel 2: Buy investment properties that have a good cash flow

When you are considering investing in the real estate market this year, using cash flow strategy should be your priority.

Implementing the cash flow strategy, investors receive a weekly income from their investment property and have cash in their pockets to cover their regular property expenses. This strategy helps you minimize the cash flow risks, which becomes crucial when building your portfolio.

The higher the yield you generate from your rental properties, the more total income you will receive, which will be helpful to increase your borrowing capacity. Then, when house prices go up in the long run, the more properties you have, the more capital growth you enjoy.

However, it’s not easy to find a house with a good cash flow and rapid capital growth. The properties in big cities often have low yield. Gary teaches his students some tips about adding value to property to increase the yield, such as adding bedrooms, adding multiple incomes on one title, or splitting to multiple titles. However, no one strategy that fits all, and it depends on your financial situations and affordability.

However, for investors who have insufficient experience, it can be hard to find a rental house that meets the criteria of positive cash flow. That’s why we highly recommend you talk to a professional property coach like Gary. With the right mindset, strategies, and coaching, Gary can show you how to achieve wealth and financial freedom through property investment. You can contact Gary via phone: 0284002820, email: Gary@Garylin.co or website: www.garylin.co

Prosperity Finance – here to help

Prosperity Finance looks at property investment loan strategically, empowering you to make the best long-term, informed decisions. We are professional mortgage brokers and are here to help. Give us a call today on 09 930 8999. 

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