Dawn chorus: House price inflation 30.6%
Few signs market is actually slowing much as RBNZ prepares to hike rates next week; House prices up 4.3% in 3 mths since May Budget & already as much as Treasury forecast for 2 1/2 yrs to end of 2023
TLDR: REINZ figures showed house price inflation isn’t slowing that much, with the House Price Index up 30.6% in July from a year ago, which was the fastest ever growth in the index’s history. Prices outside of Auckland were up 32.9% from a year ago
House prices have risen 21% since November, which was when the Government announced it would pull all the demand and supply levers it could (except for taxing wealth or using its balance sheet properly to increase housing supply.
The pace of inflation actually increased in July, relative to the previous three months. The index rose 2.4% in the month and is up 4.3% in the last three months. In the May Budget, Treasury forecast 0.9% house price inflation in the year to June 2022, followed by 2.1% in each of the following two years. Inflation since May has already outpaced the official forecast for the next two and a half years.
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Hi Bernard, yet another month and yet another pathetic effort from Treasury on forecasting house price inflation. People in that organisation must know the numbers they publish are absolute BS. Government budget policy should not be made based on these stupid assumptions.
Even a simple person like me can see that basic economic factors of supply and demand (before any other influences like interest rates) will push prices up. With current sales volumes so low (and so obviously a trend over the last year) how come the hundreds of brains in Treasury don't recognise that in their inflation forecasts? Would love for you to get some hard questions answered by that bunch of what appear to be amateur economists.