Rental Shortage Boosts First-Home Buyers: A Peek at the Current NZ Housing Market conditions

Date Published: 12 May 2024

Key Facts

• New Zealand’s housing market is currently in a buoyant phase, causing issues for first-home buyers.
• Increasing house prices have created a rental shortage, with first-home buyers often getting outbid at auctions.
• The market’s high demand and lack of supply have been linked to returns of expatriates and low-interest rates.
• The Reserve Bank of New Zealand (RBNZ) has hinted at implementing LVR restrictions, which may affect the market trends.

Article Summary

The housing market in New Zealand is going through a vibrant phase, causing problems for first-home buyers in particular. The escalating house prices have led to a shortage in rental properties. As a result, numerous first-home buyers struggle to win at auctions against high bidders.

The high demand for properties combined with the lack of supply has caused this boom in the housing market. Experts have pointed that the significant returns of expatriates due to the COVID-19 pandemic, as well as the maintained low-interest rates, have significantly driven the demand.

In response to the current market trends, the Reserve Bank of New Zealand (RBNZ) has hinted at implementing Loan-to-Value Ratio (LVR) restrictions in the near future, which could affect the buying capacity of numerous first-home buyers and investors. These restrictions could possibly level the playing field for first-home buyers.

It is crucial for both home buyers and investors to keep an eye on the changing trends in New Zealand’s housing market, as authorities are working on implementing measures that could affect the prevailing dynamics in the future.

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