End in sight for rising house prices

BNZ’s Chief Economist Tony Alexander reflects on the New Zealand housing market and upcoming changes around the minimum deposit size, that takes place from September 1.

As a macroeconomist my job is to avoid getting mired in the details of what is happening in particular parts of the economy and instead to focus on the big picture and the broad trends. These are the things which I talk about when making presentations to groups of retailers, home buyers, home builders, manufacturers, investors, farmers and so on around the country. Continue reading…

The tricky truth behind our falling homeownership rate

BNZ’s Chief Economist Tony Alexander reflects on trends in Auckland’s housing market.

Much has been made of data released in recent years showing a downward trend in the rate of home ownership in New Zealand from an estimated 74% in 1991 to an estimated 65% in 2013. There are many problems with the calculation including a lack of knowledge of who owns about 20% of the country’s housing stock and houses moving into family trusts. Continue reading…

The buyers are back: Auckland’s housing market

Last month I wrote about the way in which data for Auckland were suggesting that the pause in Auckland’s housing market following the October introduction of an IRD number requirement had ended. The March data confirm this. After rising on average by 5.5% in February Auckland sales prices rose another 4.3% in March. Sales were down 12% from March 2015 and this goes to show that what caused the pause was not sellers placing properties on the market but buyers holding off. Now they are back. Continue reading…

Data crunch: An update on Auckland’s housing market

There are many statistics which get thrown around regarding the Auckland housing market. Personally speaking, as a macroeconomist, I ignore the data broken down by suburb though for many people that is the most important information. Instead I look at numbers for the city as a whole. My preference is the REINZ dataset which is more up to date than the Core Logic/QVNZ information. Continue reading…

A Place in the Sun: New Zealand house prices versus overseas

There is a programme on TV which I like to watch called “Place In The Sun”. There are various versions of it but the central idea is that average English people have decided they want a second home for holiday purposes located in a sunny place such as Spain or Portugal. They get taken through five properties and choose which one they like the most and sometimes make an offer and end up with an agreement on camera. Continue reading…

As low as they’ll go: Interest rates and Auckland’s housing market

The Reserve Bank cut its official cash rate by 0.25% on December 10 so it is now back where it was in March last year before 1% worth of increases to fight expected inflation. The inflation never came. In fact rather than reaching a predicted 1.6% inflation fell away to just 0.4% courtesy of a firm NZ dollar, falling fuel prices, and factors unexpected by the Reserve Bank. Continue reading…

Retirement, increasing life expectancy, and the demand for investment property

It’s interesting to think about the impact of increasing life expectancy on demand for investment property. Basically, the longer people expect to live the greater their ability to recover from a financial shock and the longer the payoff from investing in an asset which produces both growth and capital gain. This aspect of increasing life expectancy is probably still in its infancy but will attract more discussion in coming years. Something which has been with us and having a strengthening impact for over a quarter of a century, however, is the message to get ready for retirement. Continue reading…

3 reasons Auckland’s housing market went into overdrive

Late last year we started to see a spike in activity in the Auckland housing market in terms of both turnover and prices. It looks like a key driving force behind this was a rush of new investors entering the market, probably encouraged by three key things. Continue reading…

Why Auckland’s housing market is so different

Welcome to the first issue of our new monthly publication which focusses on the state of the Auckland housing market. This is a market which has performed very differently from all others around New Zealand since the end of the global financial crisis in early-2009, with that difference best seen through price comparisons. Continue reading…