On average, 800 people arrive in Auckland every month looking for somewhere to call home. But nowhere near enough affordable homes are on the market to meet current demand.
Tony Alexander, the BNZ's chief economist says the shortage will continue to get bigger in the next few years, mainly due to rising construction costs and red tape. He says delays are pushing some builders out of the sector, and that resources are in short supply.
Alexander expects investors will start quitting the market, but not in enough numbers to meet pent-up demand from people looking for a home.
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"If the focus on some unhappy investors goes long enough, as I suspect it will, we will see the Reserve Bank ease LVR rules a little bit more," he says. "When will ears start hearing the banging from frustrated buyers and renters? There is no way of knowing, but it could happen within 12 months."
He also predicts a downside to the Government's proposed shared home ownership scheme.
"That represents a rise in demand. That means higher prices," says Alexander. "Where does this all end some years from now? Recognition that home ownership is an unrealistic expectation for many people until perhaps much longer in their working lives than currently desired."
Glass half full
Can't help but comment on a claim that if property investors are put upon by government
regulations then there will be fewer rentals.
If property investors decide not to buy (or opt to sell) then it could mean more options for first-time buyers, and that's got to be good.
Mixed market down south
Home sales in the South Island, via realtor Harcourts, puts the average price of a house at $469,789 — up 15 per cent on April 2017. In Christchurch the average sale is $517,034 (down almost 6 per cent on April last year).