Dominick Stephens, Westpac chief economist, today also revised his national house price forecast from up 7 per cent this year to up 10 per cent.
Dominick Stephens: The market has proved slightly stronger than we anticipated. We now expect the current upturn to culminate at a rate of 10 per cent annual house price inflation in the middle of the year.
New Zealand construction activity has ramped up substantially while net migration has steadily declined. However, house prices have still shot higher. We think that has been due to a big reduction in interest rates combined with the cancellation of earlier plans to introduce a capital gain.
The forecast was backed up by relevant data provided by online portals like REINZ and TradeMe say.
REINZ: January showed a strong start
REINZ chief executive Bindi Norwell said:
Normally January is a quiet time of the year, and for a few regions that was the case, however, overall the country had a strong start to the year with the most residential properties sold for the month of January in four years.
TradeMe: “record-breaking rents after the national median rent rose 4 per cent”
Data shows the summer rental rush was in full swing in January and every region saw an annual increase in rent. The number of enquiries rose 86 per cent on December. Wellington is still the most expensive region to rent with the median weekly rent rising $25 on last January to $575 per week.
“FOMO fever is back and it’s the fear that Aucklanders are missing out, not because of sky-high prices or sky-high interest rates, but because options are limited.”
