In January this year Prime Minister Jacinda Ardern insisted: “We can’t stand by while house prices increase at the unsustainable rates we saw in 2020.”
So what has happened since?
During Auckland’s level 4 and level 3 period – August to November – house prices rose $113,000, or 8.3%. In the 12 months to November, Auckland prices rose 27.9%.
The speed at which house prices have risen in NZ has even attracted the attention of The Economist. It noted recently that
“… in the past year, prices in NZ have shot up at a pace of more than NZ2000 a week. Costs in big cities have been going up for years, propelled by a mix of cheap borrowing and a scarcity of new homes”.
The pandemic has made matters worse: lockdowns boosted demand while labour and materials shortages constrained housing supply.
The Economist said that as housing costs rocket, governments besides NZ’s have taken aim at large investors. Others include Spain and Ireland.
The government in this country has a fresh target and has wasted no time in publicising the fact that new Opposition Leader Christopher Luxon is the owner of seven properties.
Radio NZ reports that house prices in 2020 rose 15% nationwide.
It says so far in 2021, house prices have risen more than that, at 22.8%. At the start of this year the average house price was $839,000; now it is $1.03m.
Since November 2017, the national average house price has risen 54%.
That’s some achievement the Ardern government has racked up, critics may say.
The average national house price then was $670,000, according to Quotable Value.
Some authorities reckon a buyers’ market in housing may emerge because there has been a surge in new listings recently. But a legacy of Covid will almost certainly be global inflation and there is every indication inflation in NZ could be running at 6% next year.
So what about renting accommodation? The news isn’t great there either.
Data published by interest.co.nz. shows the biggest jumps in rents were recorded in Papakura and Franklin in Auckland’s south, and in Tauranga and Hastings, which all recorded increases of more than $70 a week.
In the main urban districts the cheapest place to rent a home was Timaru, where the average rent in the September quarter this year was $363 a week. The most expensive district was Auckland’s North Shore on $625.
Point of Order looks forward to learning what the Prime Minister will offer, as a promise on housing and its costs, come January 2022.