'Ghost of Muldoon' looms over housing market - expert - Property News AU/NZ | propertynoise.co.nz & propertynoise.com.au

PHOTO: House prices in New Zealand too high for buyers to get Government’s First Home Grant. Getty/Newshub.

An investment expert has warned the property market is starting to look “shakier” than it has been, with the “ghost of Muldoon” waiting to pop the bubble.

It comes as new data from Trade Me shows asking prices continuing to go up and the nationwide median surpassing $800,000 for the first time, but also amid anecdotal evidence investors are losing interest in property following the announcement of new tax rules in March.

“At a recent event in Auckland, I remonstrated that house prices could slide,” editor of financial site Wealth Morning, Simon Angelo, wrote in a post on Wednesday. ” It may not seem possible, but it is. You could have felt the perspiration dampen the room… the mood began to darken.”

Angelo says the Kiwi property market right now is remarkably similar to how it was in the early 1970s, huge gains “based on high net migration and shortages of builders and materials”.

House prices spiked about 75 percent between 1971 and 1974 before ending the decade pretty much where they started, Angelo said. Sir Robert Muldoon’s government, elected in 1975, oversaw a massive slide in values.

“Muldoon’s government became alarmed then, as [Jacinda] Ardern’s one seems to be now. Planning controls were loosened to allow more flats to be built in cities.”