Aggressive banks drive housing boom

The report quoted Real Estate Institute figures showing that it took an average of just 25 days to sell a house in August compared with 35 days in August last year and 51 a year earlier. A record 10,138 houses were sold nationwide during the month and the median price was an all-time high of $215,000, up 1.8 per cent on July and 16.2 per cent on August 2002.

The continuous stream of record housing figures in New Zealand and many other countries has become a huge media story. It is front-page news in Timaru, Nelson and Auckland, a leading television news item, a major topic of conversation in pubs and at the dinner table and most taxi drivers are experts.

There is no doubting that we are in the midst of a major bull market in residential housing, but what are the main reasons for the boom and what will be the catalysts, if any, for it to end?

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