house price growth

PHOTO: Adrian Orr on The AM Show. Image – Getty Images/The AM Show

The Governor of the Reserve Bank says the only drivers of house price inflation left are “the fear of missing out, the speculative behaviour, fads, fashion and cycles”.

Adrian Orr says there’s nothing fundamental left in the economy pushing them up, and expects them to “come to a grinding halt and go sideways for some time”, if not fall.

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“All of those drivers have come to a halt,” he told The AM Show on Thursday.

Last year, there were early predictions the pandemic would crash the already-inflated market – but the opposite happened, cheap credit – partly thanks to the Reserve Bank’s record-low interest rate – allowing investors to borrow and spend.

The average price according to Quotable Value has gone up 37 percent since Labour came to power in 2017, most of that in the 12 months to April – which began with the lockdown and ended with the mean price over $900,000.

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