Tag: New Zealand Property

New Zealand housing is a significant bellwether for other markets, seeing as pricing peaked early due to excessive stimulus associated with COVID, and then the Central Bank started to lift the cash rate ahead of other central banks. Now we are seeing the impact spilling out into the housing sector.

Westpac, the last of the main banks, has now moved to raise home loan rates. Though like two other rivals, Kiwibank and BNZ, they have refrained from raising their 3.99% one year fixed rate.

The QV House Price Index has experienced its largest drop in more than a decade, with the main centres currently taking the brunt of the impact of rising interest rates and tightening bank credit.

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I caught up with Leonard Hong, Analyst at The New Zealand Initiative – A Think Tank – who released a report on housing in New Zealand.

https://www.nzinitiative.org.nz/reports-and-media/reports/the-need-to-build/

“The political ‘buck passing’ of the responsibility for unaffordable housing by successive governments in New Zealand has created extremely expensive housing markets in cities such as Auckland and Wellington – and a national housing crisis. Auckland is the sixth least affordable city among 92 major global housing markets, according to the 2020 Demographia housing survey. The real price of housing in New Zealand increased by 171% from 2000 to 2019, compared with just 11% in Germany in the same period. Despite former Housing Minister Phil Twyford’s reforms, the government has prioritised supressing demand and targeting financial speculation from overseas. Demand-side solutions are just tinkering at the edges of the problem. Long-term demographic transformations and changing household sizes are affecting overall housing demand. Inflexible housing development is the core problem, and only freeing up enough supply can solve our housing unaffordability and overcrowding.”

Go to the Walk The World Universe at https://walktheworld.com.au/

We look at the “stupid” trajectory of New Zealand home prices, which are being stoked by poor Government policy and Central Bank intervention. Is it likely to change?

Go to the Walk The World Universe at https://walktheworld.com.au/