House prices could increase by 12 per cent nationally over the next three years, with Hawke's Bay homes climbing in value by as much as 20 per cent, a mortgage insurer says.
A report into the country's housing market, released yesterday, finds a shortage of new housing is driving house valuesup. The survey was conducted by Infometrics for Australian mortgage insurer QBE Lenders' Mortgage Insurance.
Infometrics general manager Gareth Kiernan said low building activity in Auckland in the past six years was one of the leading factors in the projected increase.
The largest increase forecast in housing prices is in Hawkes Bay, where property values could rise by as much as 20 per cent between June 2011 and June 2014, according to Infometrics.
The introduction of tax changes by the Government had adverse effects on demand for property over the past 12 months.
