PHOTO: SUPPLIED Palmerston North’s average house price hit a record $522,000 in February, a 21 per cent increase on 12 months ago.
Experts predict the global economic downturn caused by the coronavirus will take the heat out of the New Zealand housing market, but high demand means Manawatū houses are unlikely to become more affordable.
ASB economist Mike Jones predicts house prices nationwide will slip back 0.5 per cent in the three months after June, and another 1 per cent in the September quarter as the economic effects of the coronavirus start to show in the housing market.
But Brad Olsen, an economist at Infometrics, an economics consultancy, says the falls could be more than that.
“We’d expect house price falls of between 5 per cent to 10 per cent over the next year, and there’s obviously downside risks to this view as conditions continue to deteriorate further as the pandemic toll continues to grow,” Olsen said. “With the economy heading into a severe downturn, the stage is set for a housing market fall.”
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