house prices

PHOTO: Simon Bridges on The AM Show. Getty Images/Newshub

Simon Bridges says anyone who thinks house prices will suddenly stop going up, as Treasury is predicting, might as well believe in UFOs.

Treasury on Wednesday forecast house prices would increase just 0.9 percent in 2022, a huge drop from 2021’s expected figure of 17.3 percent.

The figure was in its 2021 Budget Economic and Fiscal Update, and touted by Finance Minister Grant Robertson as a “very sharp adjustment in house prices, but a very necessary one”.

Post-2022, Treasury expects values to keep rising, but nowhere near as quickly as they have in the past couple of years – from 2.1 percent in 2023 to 2.5 percent in 2025.

Appearing on The AM Show on Friday, Labour MP David Parker said the 0.9 percent figure was down to the housing boom, with consents at their highest in nearly 40 years.

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“One of the reasons house price inflation is predicted to essentially disappear is we’re building so many houses now in this country,” he said.

“House markets are never linear – they get really, really frothy, and then they settle down. They’ve been really, really frothy, and now they’re settling down.”

Bridges, appearing with Parker, was as sceptical as The X-Files‘ Dana Scully.

“Do you believe in UFOs, David? I want you to keep talking because we’re going to play this back to you in a year,” he said.

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