House prices will rise faster this year than they did in 2012, BNZ’s chief economist says.
Tony Alexander says a lack of supply and a turnaround in migration will push up prices.
Migration figures – while still showing net outflow – show fewer people overall leaving the country on a permanent basis.
Tony Alexander says: “The trend is toward improvement and this is relevant to the housing market because more people means more demand for accommodation.”
That, combined with the fact that the number of properties on the market is dropping, will keep the heat on.
Realestate.co.nz reported this week that the number of new listings decreased by 4.2% during the three months ending January and were only 0.8% ahead of a year earlier. The website had reported an annual rise of 6.2% in the three months ending October and 9.2% in the three months ending July.
Alexander says: “What this tells us is that the trend is possibly toward fewer listings coming onto the market and we can get another gauge of this by looking at the total stock of listings. At the end of January this stock stood at 41,665 seasonally adjusted. This is the lowest stock level since the data series started in January 2007.”
He said, however you looked at it, there was a clear tightening of supply.
“That has such very obvious implications for prices. Imagine what will happen when the migration data turn positive and the unemployment rate falls below 6%! My view is that this year average house prices will rise by more than they did over 2012.”