New Zealand House Prices Continue to Soar Despite Curbs -- Update
By Stephen Wright
WELLINGTON, New Zealand--New Zealand house prices continued to rocket higher in June despite central bank and government measures intended to cool property speculation.
The median national sales price of 820,000 New Zealand dollars ($573,000) was nearly 29% higher than a year earlier, the Real Estate Institute said Tuesday.
Fewer homes were sold in June than the previous month, but median days to sell--an indicator of the intensity of demand--of 31 days was 15 less than mid-2020, it said.
"The market is refusing to cool," said the real estate institute's chief executive Jen Baird. "Today's data really points to how important it is to address the housing supply issues we have."
Record-low borrowing rates brought on by the pandemic have fueled increases in property prices world-wide. Tight supply of new housing also has contributed to New Zealand's record increases in prices, worsening a problem of home ownership becoming unaffordable for some.
The handbrake effect of tax changes that targeted property investors, as well as the Reserve Bank of New Zealand's loan-to-value restrictions, has been much more muted than hoped, said Jeremy Couchman, an economist at Kiwibank.
But price increases appear to have peaked near 30% and should diminish as mortgage rates are likely to rise sooner than previously expected, he said.
An increase in home construction should boost supply of new properties, though builders are struggling to find the workers needed to keep the building boom going, Mr. Couchman said.
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