NZPIF executive officer Andrew King
by Miriam Bell
NZPIF executive officer Andrew King
Reserve Bank Deputy Governor Grant Spencer said that growing numbers of small investors were contributing to price pressure in Auckland.
He said data showed that investor activity in Auckland has increased from 33% in 2013 to 41% in 2015.
NZPIF executive officer Andrew King said the Federation disagreed 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.”
In reality, the issue is a supply and demand problem, King said.
Over the past year, net migration has increased by nearly 60,000, and many of those migrants are settling in Auckland.
The resulting population growth is creating demand at a time when the SuperCity is already suffering from a major supply shortage.
“Hitting investors to try to curb demand is unlikely to yield the result the Reserve Bank wants,” King said.
“We actually need more rental properties in Auckland as there are signs of overcrowding due to shortages.”
Prime Minister John Key also believes Auckland is suffering from a supply and demand problem.
At his post-cabinet press conference, he said Government and RBNZ responses to the issue are starting to address the problem, while interest rates won’t stay at their current lows forever.
Christchurch is an example of how prices stop going up when supply starts to meet demand, Key continued.
“So, if people are going to go and buy Auckland houses purely for capital gain, then they are going to come in for a nasty surprise – just like those people who bought stocks on the expectation they would keep going up had a nasty shock today.”
Key also said the Auckland housing market is not yet at a crisis point and that, overall, New Zealand’s banking system is very healthy.
| « Record high migration adds to housing pressure | Free Investment Property Showcase Events: Auckland, Wellington and Christchurch » |
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