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Intervention expected for housing market

The Government is "almost certain" to intervene in the housing market to help first home buyers and boost residential construction, according to CoreLogic.

Wednesday, February 03rd 2021

The real estate research firm believes policymakers are set to take action after a record rise in house prices through 2020. 

Nick Goodall, CoreLogic's head of research expects new measures to help younger first home buyers, who are frustrated about a lack of affordability. 

There are rumours that the Government will increase the cap for homes eligible for the First Home Grant, with most homes too expensive for the scheme.  

The Government's intervention, according to Goodall, will coincide with the reintroduction of loan to value ratio restrictions.

While measures to help first home buyers is expected, Goodall doesn't expect Government policy will hurt existing owner-occupiers and investors.

"Confidence in the New Zealand property market remains high, as the fundamentals of strong demand and limited supply remain. The outlook is for further growth, assisted by political commentary regarding the need to protect property wealth," he said.

Goodall added that the nationwide demand for mortgages through January had already risen to levels seen at the end of 2020, "as buyers take advantage of low interest rates and act with urgency in the competitive market".

The comments came as CoreLogic unveiled its latest House Price Index report.

According to the study, the residential property market grew again last month, though at a reduced rate relative to the month before.

The HPI for January 2021 shows nationwide property values grew by 2.2%. The market has grown by 12.8% in the past year – the highest rate since the end of March 2017.

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