The forecasted slowdown in New Zealand’s house price growth suggests that the efforts of the Reserve Bank and government to stabilise the over-heated property market are beginning to take effect. According to these forecasts, the national median house price is not expected to return to its 2021 peak until after 2029. This comes after a period of rapid increase when median house prices jumped by a significant 24% between October 2020 and October 2021, nationwide.
The prediction outlines that in the short-term, house prices will experience a dip over the next two years. The national median house price is projected to decline by 0.9% in 2022, followed by a more substantial drop of 6.1% in 2023. This downturn is seen as a correction following the extraordinary price hikes witnessed over the past year.
Post 2023, the housing market is set to experience a slow recovery period. Starting from 2024, house prices are predicted to rise slowly, with an average annual growth rate of 2.9% projected until the end of the decade. This steady rise indicates a return to a more normal and sustainable pace of growth for the NZ property market, moving away from the earlier unsustainable price surges.
Key Facts Prime Minister Christopher Luxon did not explicitly say he wanted average house prices to fall, seeking only “downward pressure”. Housing Minister Chris Bishop stated that house prices need…