- Housing crisis in the country hits new lows.
- The average house price witnessed a sharp surge.
- According to predictions, things could get better in the near future.
New Zealand housing crisis seems far from over with ever increasing rates of the houses for the first-time buyers and investors. It is being predicted that if things are to move at the same pace, before the year was out, the average price of a house would cross NZ$1M. Not only would this take the dream of owing a home further away from New Zealand’s first-time home buyers, but also cause a lot of disparity in the market.
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In a span of three months, the prices have seen an increase of 8.9%. Even though the Government is taking steps to cool off the housing prices, it does not seem to be working as anticipated. The pace seemed to have picked up by 21.4% in the previous year in comparison to 18.2% in the year up to the month of March.
There are currently expectations being made about some respite in the coming months in the rate of growth in prices, which is going to be beneficial for the first-time homeowners to finally enter the market.
New Government Policies
The NZ Government is really concerned and has involved RBNZ in cooling off the asset price. RBNZ is mulling to bring in stricter LVR norms so that it is not so easy to take a loan for the speculative investors. The demand cools off and the supply situation accordingly improves.
It is regretful that while COVID-19 slowed down many sectors, it had the opposite impact on the housing market.
Going by the current state of things, if a person saves every single penny of what they earn without spending anything on groceries or other expenses for 3 years, that is when they’ll barely have enough money to make the deposit on an average property in New Zealand right now.
The government has been putting in several efforts in this direction lately, right from setting guidelines in order to weed out house flippers to making more investments in newer properties. It has currently been to no real good as the prices are still on a surge.