New Zealand’s house price growth is the second fastest in the world, according to an international real estate consultancy.
The Knight Frank Global House Price Index shows that in the first quarter of this year, world house prices rose 7.3% through March 2021. New Zealand hit 22.1% .
This is the fastest rate of increase recorded since the last months of 2006 and reflects the galloping market growth observed in many countries.
Turkey recorded the fastest house price increases for the fifth consecutive quarter, growing 32%.
* Budget 2021: a sudden adjustment in housing prices to come, according to the Minister of Finance
* Record housing price growth “justifies government intervention”
* Hamilton home prices continue to rise
But Knight Frank researcher Kate Everett-Allen said that if inflation was suppressed, Turkey’s real prices rose by around 16% over the year.
In addition, in the top ten were the United States at 13.2 percent, Sweden at 13 percent, Austria at 12.3 percent and Norway at 10.9 percent.
Canada was ranked 11th and Australia 18th with annual growth of 10.8 and 8.3 percent respectively.
Everett-Allen said that with 13 countries recording double-digit price growth in the past year, it was no surprise that discussions of post-pandemic property bubbles are on the rise.
But authorities were already starting to take action with the introduction of cooling measures in a number of markets, including China, New Zealand, Ireland and Canada, she said.
In New Zealand, the Reserve Bank restored loan-to-value ratios earlier this year. In March, the government announced a series of new real estate and tax policies intended to rule the market.
Everett-Allen said that with government action and fiscal stimulus set to end later this year in a number of markets, buyer sentiment would likely be less exuberant.
“No longer the threat of new variants [of Covid] and stop / start vaccine launches have the potential to put further downward pressure on price growth. “
But the spike in house prices did not hit all countries and there were several large economies where strong price growth remained elusive and sales had yet to gain ground, she said. .
They included Italy, India and Spain, all of which saw lower price growth in the first months of this year than last year. This was due to either strict closures, economic concerns, or oversupply.
New Zealand’s galloping market has already garnered international attention this year.
In April, Bloomberg flagged it as one of the least affordable in the world, while the 2021 annual international housing affordability report Demographia ranked the Auckland market as the fourth least affordable in the world.
CoreLogic’s May data, released on Tuesday, showed price growth was starting to slow, although CoreLogic’s research chief Nick Goodall said it was unlikely to do so at the expected rate. by the Treasury and the Reserve Bank.
But the results of the latest survey from the Real Estate Institute and economist Tony Alexander suggested the market was in a holding position as buyers awaited government clarification on new tax policies.