The second half of 2016 continues to be a period of change in the New Zealand property market.

How does foreign investment look in the wake of Brexit?

Evolving technology, the reaction to Brexit and the continued disruption of Airbnb all present challenges and opportunities.

With the New Zealand property market at an all-time high, how sustainable is this extended period of growth? Many are speculating that the property market will take a hit post-Brexit.

Post Brexit Jitters

Any economic jitters may transfer to the New Zealand property market, not least because UK tourists to New Zealand are the fourth biggest national group to visit and are major investors in New Zealand residential, holiday, commercial and industrial property.

While the weakened pound restricts spending power, the property market is robust with demand still far outpacing supply.

New Zealand’s property market has been a safe haven for investors looking for reliable yields following the 2008 global crash, and uncertainty in the global markets is likely to further reinforce New Zealand’s property market as a safe bet. Any downturn on the back of Brexit is likely to be short-lived.

Interest in New Zealand residential property spiked the week after Brexit, indicating a short term boost for the property market. It is believed to stem from disgruntled “remainers” not wanting to live in a UK that is outside of the EU.

Airbnb Disruptive Upstart

Airbnb continues to change the way we see the vacation rental market but the long term effects are still unclear. It is a fact that Airbnb reduces long term rental stock, but the question is to what extent?

And does it push up prices for locals looking to rent? The reality is that nobody yet knows how many buy-to-let landlords are using Airbnb instead of renting out on long term contracts. Experts in New York say Airbnb has taken 10% of the residential rental market into the vacation rental market.

Any comparable figures in New Zealand would further decrease supply and increase demand quite significantly. Good news for property managers, landlords and builders – not so great for those aiming to get onto the property ladder.

With Airbnb making renting rooms out easier, the issue may be one of the rental market expanding, rather than Airbnb reducing supply of residential stock.

Regardless, small property investors looking to enter the property market have upsides, as well as established vacation rental companies; the likes of Airbnb expand their potential client base enormously.

As ever, with the advent of new paradigms come challenges and opportunities, and property managers must adapt to the evolving nature of the industry meaning that understanding the new booking channels (Airbnb, Homeaway, VRBO etc) is a must.

Nobody yet knows how many buy-to-let landlords are using airbnb instead of renting out on long term contracts - Sarah Dawson