Treasury and Reserve Bank see prices rising another 22% over next 3-4 years because interest rates are low, housing supply isn't growing fast enough and the tax incentives are still there
'Spreadsheets don't.' Really Bernard? Have you not heard of lies, damn lies, and statistics.
Of course, they lie.
Your first bullet point highlights this. The 20% of 1.5t is based on price rises caused by a shortage of supply relative to demand. Approx. half that 1.5t is based on non-value-added costs caused by this.
If supply is allowed to meet demand, then a lot of that non-valued added rentier gain will disappear.
But with the artificial jump in price, then the % falls, making it look better than it is. As a metric for determining what is 'good', it has less relevance, ie it has decoupled from being a meaningful measure of performance.
And we know all this and more because, in other jurisdictions where they have had all the same 'reasons' happen to them, their prices have stayed around 3 to 4 x median household income.
Also, I think the issue of council rate increases needed to feed council infrastructure stuff-ups is going to be a drag on the price.
And in the face of climate change virtue signalling, the Govt. are not going to be able to increase the cost to build, or open up the immigration tap like they used to.
Bernard, one issue you could look into, is where the present housing demand is coming from?
Is it all internal NZers, ex-pats, or money coming from the Aussie and Singaporean foreign exemptions?
From what I can tell, the total mid-term demand has not changed. Many sales are off the plan, especially sections and house and land packages, with title and settlement up to 24 months away. This is pulling future demand into the present and thus those people that would have been buying in 24 months under a more stable environment have bought today, which bumped up today's demand and supply imbalance, but also means they won't be around to buy in 24 months time, so will cause a reversal in at that time.
'Spreadsheets don't.' Really Bernard? Have you not heard of lies, damn lies, and statistics.
Of course, they lie.
Your first bullet point highlights this. The 20% of 1.5t is based on price rises caused by a shortage of supply relative to demand. Approx. half that 1.5t is based on non-value-added costs caused by this.
If supply is allowed to meet demand, then a lot of that non-valued added rentier gain will disappear.
But with the artificial jump in price, then the % falls, making it look better than it is. As a metric for determining what is 'good', it has less relevance, ie it has decoupled from being a meaningful measure of performance.
And we know all this and more because, in other jurisdictions where they have had all the same 'reasons' happen to them, their prices have stayed around 3 to 4 x median household income.
Also, I think the issue of council rate increases needed to feed council infrastructure stuff-ups is going to be a drag on the price.
And in the face of climate change virtue signalling, the Govt. are not going to be able to increase the cost to build, or open up the immigration tap like they used to.
Bernard, one issue you could look into, is where the present housing demand is coming from?
Is it all internal NZers, ex-pats, or money coming from the Aussie and Singaporean foreign exemptions?
From what I can tell, the total mid-term demand has not changed. Many sales are off the plan, especially sections and house and land packages, with title and settlement up to 24 months away. This is pulling future demand into the present and thus those people that would have been buying in 24 months under a more stable environment have bought today, which bumped up today's demand and supply imbalance, but also means they won't be around to buy in 24 months time, so will cause a reversal in at that time.