House prices grew at a record rate for the second consecutive month
As house prices continue to soar, buying a first home will be difficult for most people this year, according to CoreLogic.
CoreLogic’s latest House Price Index (HPI) revealed that nationwide property prices increased by a near-record growth rate of 2.6% in December 2020, with the average property price hitting $788,967.
As house prices continue to skyrocket due to low-interest rates, attractive capital gains, and tight supply, CoreLogic head of research Nick Goodall said entering the market will be impossible for many Kiwis in 2021.
“Even with availability, credit, and low-interest rates, the more property [prices] increase, the more difficult it’s going be for the number of people to access that amount of money to buy a property. As that happens, demand will reduce, and you’ll likely see a slowdown in price growth,” Goodall said, as reported by RNZ.
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Renters United spokesperson Ashok Jacob said house prices were a national crisis. The lack of housing supply was also squeezing the rental market, with many Kiwis now flocking towards flats and other rental properties.
“There is not enough supply, and that is one of the main things that need to happen. There needs to be a huge amount more houses built,” Jacob told Morning Report.
“We’re seeing that disparity between people who have a lot of capital and people who are just trying to make ends meet. We’re seeing that disparity increase.”
Infometrics senior economist Brad Olsen emphasised the increasing pressure on the government to act quickly.
“In the short term, there is going to be incredible political and economic pressure over the next six months or so around house prices, affordability, and housing in general,” he told RNZ.
