NZ’s housing crisis to get ‘worse and worse’, senior economist warns

Infometrics’ Brad Olsen this morning told Breakfast it will take years to build enough houses to make a difference to demand on the housing market.

Despite nearly 40,000 consents for homes being granted last year, there are concerns the market is still tens of thousands of houses short of meeting demand.

“We were expecting a bit of softness last year and it didn’t come to eventuate, in fact it’s gone the other way. You mention rocket ships, I mean this is very much the only way you can really describe it at the moment,” Olsen told Breakfast host Scotty Stevenson of how the market is looking.

“Our expectations on our new and much more optimistic forecast for the general economy also see those house prices still going up at a fast rate.

“We expect that even in the middle of this year we could see house prices still rising at 15 per cent per annum. Now we might see those slow a touch to under double digits towards the end of this year but that’s still going up nine-or-so per cent per annum.

“Things are only going to get a bit slower, but certainly not fall unless we have a big change in employment levels or something similar, the house prices scenario, and in fact the housing crisis seems set to get worse and worse.”