Analysts forecast that the housing prices in New Zealand will decrease by 18% compared with the maximum value. This is more than their earlier forecasts. Such a decrease was caused by the sharp growth of interest rates which damped an already slowing housing market. This data was shown by a Reuters poll.
During the coronavirus epidemic, the average price for a house in the country increased by more than 40%. It happened before the prices peaked in November. RBNZ considered it unacceptable to raise prices to this level.
The central bank sharply increased the interest and lending rates after which the prices immediately fell. However, this wasn’t enough to make housing more affordable. Many citizens are forced to rent apartments because of this situation.
From November 9 to 21, 12 real estate analysts conducted a poll for Reuters. It showed that this year the average price for a house is expected to decline by 11.5% and in 2023 by 6.0%.
Such estimates showed that the decrease was stronger than previously believed. In the September poll, the figures were 10.0% and 5.0%.
The central bank declared that they expect the housing prices to decrease by almost 20% compared to the maximum of a year ago. However, some respondents answered that prices should be even lower. Such a step is necessary to make housing affordable.