High house prices are a worldwide worry and no country has worked out how to tame them, says the boss of one of New Zealand's biggest real estate firms.
Peter Thompson, managing director of Barfoot & Thompson, recently attended a real estate symposium in Vienna with 160 of his counterparts from 22 different countries.
Thompson observed from the conference that fears over property bubbles or concerns that house prices had outpaced salaries were present across different markets.
"Rising house prices is an international phenomenon, and no country or market has tamed it or has an answer," Thompson said.
"All the delegates [at the symposium] reported their country was dealing with the exactly the same issues.
"The consensus opinion of delegates as to the key drivers for the rise in property prices was the ready availability of mortgage finance, the extended period of low interest rates and the switch the public has made to seeing residential property as a 'safe haven' rather than as an 'investment'.
"Worldwide people have reached the conclusion that with returns on term investments and bonds being so low, over the median term, residential property represents a far sounder place to keep your money.
Growth in the New Zealand house market has slowed considerably in recent months, although prices have risen year-on-year.
Median house prices overall were up 1.2 per cent in the year to September at $525,000, according to the Real Estate Institute of NZ.
In Auckland, the median house price was up 5.7 per cent over the same 12-month period to $845,000.
Thompson said that despite different attempts at regulation - such as capital gains tax, bans on foreign buyers or stricter requirements to get loans - prices were rising year-on-year around the world
"No one, or combination of measures, has held back price rises.
"Each market has its commentators predicting price crashes, but not one market has experienced a major price downturn.
"While we think of markets such as Sydney, Auckland and Melbourne going ahead in leaps and bounds, they are not on the radar of international buyers. In Europe the real hot spots are London, Paris, Berlin, Amsterdam, Copenhagen and Milan.
"The message I took from the symposium is that until mortgage interest rates increase significantly, high residential property prices around the world is something we are likely to have to learn to live with," he said.
One thing which impacts the interest charged on mortgages is the Reserve Bank's Official Cash Rate, which is at a record low 1.75 per cent. The market expects this to go up late next year while the RBNZ's own forecasts suggest a rise in 2019.
The OCR is just one influence over what happens to interest rates. There are others, including demand for mortgage finance and overseas funding costs - largely influenced by the US Federal Reserve.
Expectations are that the Fed will raise rates three times next year, but there remains conjecture as to when or if the bank will move.