PHOTO: WESTPAC. FILE
MEDIA RELEASE
The New Zealand housing market is currently red-hot. The REINZ House Price Index, seasonally adjusted by Westpac, showed a price increase of 3% in October, the biggest monthly increase since 1996. All of the usual indicator dials are now redlining, indicating ongoing rapid house price inflation for at least the coming few months. Market turnover is the highest it has been since 2007. The average number of days taken to sell has dropped rapidly and is the lowest it has been since 2016. And stock available on a key real estate website has dropped sharply and is at an all-time low.
We think the current episode of house price inflation has a way to run yet. We are forecasting a peak of 16% annual house price inflation in June 2021, and a full-year increase over 2021 of 12.2%. House prices are being driven higher by low interest rates, and interest rates are set to stay low or fall further over the coming year. Meanwhile, other factors such as net migration and the economy are going to improve. So
our models point to ongoing rapid house price increases.
READ THE FULL REPORT HERE: WESTPAC NZ_Home_Truths_December_2020
