PHOTO: Supply of new houses is soaring, with 42,848 consents issued for new dwellings in the year to April. Photo: RNZ / Nate McKinnon
The risk of a sharp correction in the housing market is rising, with an explosion in supply likely to coincide with a fall in demand, BNZ economists warn.
In a research note, the bank’s economists note that weaker population growth, coupled with a drop in investor demand and home ownership now viewed as out of reach by many, will see demand come under pressure.
Meanwhile, supply of new houses was soaring, with 42,848 consents issued for new dwellings in the year to April.
“On a per capita basis, this is now surpassing the 2004 building boom. And, yet, there is no sign of this coming to an end anytime soon,” said the economists’ research note.
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