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The property bubble in New Zealand is a major national economic and social issue. Since the early 1990s, house prices in New Zealand have risen considerably faster than incomes, [1] putting increasing pressure on public housing providers as fewer households have access to housing on the private market.
This is the lowest rate of home ownership since 1951. This is partly due to the increase in New Zealand house prices which since 1990 have increased faster than any other OECD country. [56] Housing in New Zealand has been classified as 'severely unaffordable' with a score of 6.5 under the median measure housing affordability measure. [57]
As of 2007, real estate bubbles had existed in the recent past or were widely believed to still exist in many parts of the world. [24] including Argentina, [25] New Zealand, Ireland, Spain, Lebanon, Poland, [26] and Croatia. [27]
Goldman Sachs: Home prices to fall 21% in New Zealand, 18% in Australia, and 13% in Canada.
WELLINGTON, New Zealand (AP) — New Zealand will drastically ease zoning restrictions in a bid to “flood the market” with land for homes and override the powers of local councils to curb development, the nation's housing minister said in announcing reforms to what he called one of the world’s least affordable housing markets.
A housing bubble (or housing price bubble) is one of several types of asset price bubbles which periodically occur in the market. The basic concept of a housing bubble is the same as for other asset bubbles, consisting of two main phases. First there is a period where house prices increase dramatically, driven more and more by speculation.
The Overseas Investment Amendment Act 2018 was the result of an acute housing shortage in New Zealand during the early 21st century. In addition, national housing prices rose faster than incomes, with the gap rising from over 3.0 in January 2002 to 6.27 in March 2017. [7]
The wage and price freeze of the early eighties coupled with the removal of financial restrictions and a lack of investment opportunities, led to a speculative bubble on New Zealand's sharemarket, sharemarket crash of 1987, in which New Zealand's sharemarket shed 60% from its 1987 peak, and taking several years to recover. [61] [62]