Alanah Eriksen

Alanah Eriksen is the New Zealand Herald's property reporter, and assistant chief reporter.

UK house hunters fuel NZ market

The four bedroom detached house in Papatoetoe.
The four bedroom detached house in Papatoetoe.

First-home buyers priced out of the British market are increasingly looking to buy property in New Zealand, research shows.

Experts here say increased immigration is adding fuel to an already-inflated market, putting a strain on local house hunters.

A study by foreign exchange specialist Moneycorp showed New Zealand was the fifth-most popular place to buy for young Britons, behind the United States, Spain, Australia and France. Italy, South Africa, Portugal, Canada and Brazil rounded out the top 10.

The number of 19 to 28-year-olds using Moneycorp to buy properties abroad has increased fourfold since 2011.

While they may comprise a relatively small slice of the British market, the company said it illustrated a wider trend in the age group.

The number of Britons in their 30s buying abroad had jumped by 25 per cent in three years.

The boom was not reflected among retirees who had traditionally dominated the international property scene. The number of over-69s buying abroad had shrunk by 79 per cent between 2007-2012 as older home owners become reluctant to release their British assets.

Murray Horton, of the Campaign Against Foreign Control of Aotearoa said of the trend: "It is disadvantaging young New Zealanders, particularly young Aucklanders because of the Auckland housing bubble.

"I think New Zealanders should have first go at buying houses in their own country."

He said proposed restrictions by Labour to block all purchases of property by people who did not live here would free up more stock.

"If English people are buying houses around the countryside, the only way to sort of stop that is by applying a policy such as the one proposed by Labour."

While house prices locally this year are at an all-time high - the median price hitting $552,000 in Auckland in July - prices in Britain are also skyrocketing because of a shortage of affordable properties, large deposits required and challenging mortgage applications.

In May, the average house price in London hit a record 509,000 ($996,029.72).

In the borough of Harrow - 21km from the central city - a 73sq m two-bedroom, one-bathroom attached townhouse costs about $587,000. Roughly the same amount will get you a 185sq m four-bedroom, three-bathroom detached house in Papatoetoe - 18km from central Auckland.

In the year to July, there were 89,300 migrants to New Zealand - up 7 per cent on the previous year - with Britons comprising the biggest nationality group at 6400, according to Statistics NZ.

Real Estate Institute chief executive Helen O'Sullivan said other recent research showed New Zealand was a top destination for British middle classes.

"They could well be first-home buyers in the sense that they're going 'Right I'm an electrician, I'm never going to be able to afford to buy here. I'm going to pack up and go somewhere where my wage might buy me something'.

"It's a long-observed trend that when immigration figures increase that usually has an impact on demand for housing."

ASB Chief Economist Nick Tuffley said it was hard to gauge what effect Britons had on the local market as no figures were held on the nationality or residency of home buyers.

Our growing population with fewer Kiwis migrating to Australia and more returning as well as low construction rates - mainly in Auckland and Canterbury - was also adding pressure.

UK vs NZ

Gordon Avenue, Stanmore, Harrow, London
* $586,348 (299,950)
* Attached townhouse
* 2 bed, 1 bath, 1 off-street park
* 73sq m floor, 10.67sq m garden
* 21.2km to London (Charing Cross tube)
* Council tax: $2961.22
* Closest tube: Stanmore (2km)

20B Watson Place, Papatoetoe, Auckland
* $589,000
* Detached house
* 4 bed, 3 bath
* 185sq m floor, 434sq m land, double garage
* 18.9km to Auckland City
* Rates: $2013.14
* Closest train station: Papatoetoe Train Station (2.3km).

- NZ Herald

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