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Rising house prices is a supply issue

Rising house prices is a supply issue

The Reserve Bank is continuing to blame rental property owners for Auckland's rising house prices. They say that investor activity has increased from 33% in 2013 to 41% in 2015.

“The NZPIF disagrees that rental property activity is the prime cause of Auckland house price rises. Rental properties make up around 40% of all houses in Auckland, so you would expect that the proportion of sales would be around this level,” says Andrew King, Executive Officer of the NZ Property Investors’ Federation.

This is a supply and demand problem. Over the past year, net migration has increased by nearly 60,000, with many of migrants settling in Auckland. It is obvious that there is a supply problem. Hitting investors to dry and kerb demand is unlikely to yield the result the Reserve Bank wants.

“We actually need more rental properties in Auckland as there are signs of overcrowding due to shortages,” says King


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