4 Oct 2008

Credit crunch hits holiday home sales

8:28 am on 4 October 2008

A leading property academic says the global credit crunch has caused an increase in the number of holiday homes being put up for sale.

Chris Eves, a property professor at Christchurch's Lincoln University, says there has been a considerable rise in the number of houses coming onto the market in traditional holiday areas such as Waiheke Island, Akaroa and Queenstown.

Mr Eves says the recession has made luxury properties unaffordable, particularly because many of them do not provide any income.

"So if it is mortgaged, not only do you have your interest charges but you've also got the additional rates, maintenance, insurance - and that's just costs that a lot of people can't carry in the current economic climate."

In addition, he says, stricter bank lending guidelines in the tightening credit market have meant a decrease in potential buyers and a drop in sales.