Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Auckland housing crisis is investor-driven, NZIER says

Auckland housing crisis is investor-driven, not due to shortage: NZIER

By Pattrick Smellie

May. 28 (BusinessDesk) - There is no housing shortage in Auckland, where prices continue to rise strongly thanks to investor activity, says the chief economist for the New Zealand Institute of Economic Research, Shamubeel Eaqub.

At a briefing in Wellington for the institute's quarterly economic predictions, Eaqub said the fact rents are not following Auckland house prices up indicates price rises there are being driven by property investors rather than a shortage of supply which has seen the government fast-tracking the creation of Special Housing Areas and changes to urban limits.

“There is no housing shortage in Auckland,” said Eaqub. “If there’s a real shortage of houses you would see both house and rental prices rising. In Auckland, that’s not happening.”

In Christchurch, where there are real housing shortages, rents are rising.

Eaqub also pointed to a six month falling trend in house sales, which tend to be a leading indicator for new building consents.

Building consents have been steeply rising, but could be expected to fall as much as 30 percent in coming months, based on the historical relationship between the two indicators.

That had potential to take much of the puff out of the New Zealand economic recovery, he said, noting that even without that fall, growth tapers considerably in NZIER's forecasts to below 2 per cent annually from 2018, slower than the 2.1 percent forecast for the year to March 2018 in the May 15 Budget.

Eaqub also suggested public discourse on high levels of immigration was occurring as a "conversation devoid of facts", especially as it related to the impact of migration on Auckland house prices.

The main driver for high levels of inward migration is currently the number of New Zealanders either returning to the country or not leaving for Australia, thanks to economic recovery on this side of the Tasman and more difficult economic times across the Ditch.

The effect of that was much more diffuse and regional than a very large number of new migrants arriving and settling in one place.

Meanwhile, cities like Auckland, where high income, high skill professionals have shown some of the strongest job growth in the latest economic cycle, migration is an important source of skills to underpin ongoing economic growth.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news