Key Facts

  • Kiwibank economists predict that a rise in migration is likely to increase house prices beyond previously predicted levels.
  • Their forecasts expect house prices to rise by around 6% in the coming year.
  • Migrant influx contributes to the rising demand for housing, compounded by the loss of dwellings due to climate change risks.
  • Governmental policies around interest deductibility, the bright-line test, and the CCCFA could stimulate investor interest.
  • According to data from the Real Estate Institute, house prices increased by 0.8% month-on-month, with a year-on-year decline of only 0.2%.
  • Auckland saw its first yearly price rise in 18 months in November.
  • National average asking price increased by 0.5% in November compared to October, based on Trade Me data.
  • Property sales in Gisborne showcased significant changes, the average asking price rose by 3.5% month-on-month.

Article Summary

According to Kiwibank’s economists, New Zealand’s house prices are likely to experience a surge, driven by an increase in immigration levels than what was previously anticipated. The demand for housing is expected to rise as massive migrant inflows combine with loss of properties due to climate change risks. Policies implemented by the new Government, particularly related to interest deductibility and the CCCFA, are projected to attract more investors.

Real Estate Institute data shows a 0.8% increase in house prices month-on-month and a year-on-year decline of 0.2%. In November, Auckland saw its first annual price hike in a year and a half. Moreover, property sales showed a considerable increase, going up by 15.7% month-on-month and 12.2% over November 2022.

Evidence from Trade Me suggests that the national average asking price went up by 0.5% in November, compared to the previous month. Remarkably, Gisborne led with a sizeable rise of 3.5% month-on-month in the average asking price. However, prospects of price growth could still be constrained by the weakened labour market and ongoing affordability issues.

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