12 Reasons Why New Zealand’s Economic Bubble Will End In Disaster
June 4th, 2014This was on the front page of the most read rag in New Zealand a couple of days ago:
A two-bedroom home with its original 1950s bathroom and kitchen and not in one of Auckland’s hottest suburbs has sold for $1.08 million.
That compares with a home that was larger, newer, on a bigger section and closer to the CBD in Gisborne, which sold for just $71,000.
That’s a $1,009,000 difference in price and a Gisborne real estate agent says the cheaper investment will see a rental return that is “way ahead” of what the Auckland market is seeing.
Ahyep, she’ll be right. No worries, mate. *chortle*
Via: Forbes:
New Zealand’s economy has been hailed as one of world’s top safe-haven economies in recent years after it emerged from Global Financial Crisis relatively unscathed. Unfortunately, my research has found that many of today’s so-called safe-havens (such as Singapore) are experiencing economic bubbles that are strikingly similar to those that led to the financial crisis in the first place.
Though I will be writing a lengthy report about New Zealand’s economic bubble in the near future, I wanted to use this column to outline key points that are helpful for those who are looking for a concise explanation of this bubble.
Research Credit: AM
