What do New Zealanders want the government to do about house prices?

Two of five want the government to forcibly take action

What do New Zealanders want the government to do about house prices?

Two out of five Kiwis want the government to bring down house prices to pre-COVID-19 levels by hook or by crook, according to the latest survey by property listings site OneRoof and data insights firm Kantar.

The report found that rising house prices are a concern for most – with more than 80% saying they view the current prices as too high, while 68% said they believe that housing affordability will worsen in the next two to three years.

The view that house prices are steep was particularly prevalent among those living in Auckland and Wellington, especially in the 18 to 39 age group – an understandable perspective as the latest Barfoot & Thompson (Barfoot) data showed that the average price in Auckland last month was $1,250,886, up 5.2% on that for October, and 18.5% higher than at this time last year.

When it comes to current homeowners, however, the OneRoof report found that confidence in being able to purchase another house is divided – with more than half of the respondents sitting on the fence. Those who said they are “very confident” at being able to purchase another home  skew towards those living outside of the North Island, such as Canterbury.

According to the OneRoof report, most of the respondents pointed to property investors (62%), overseas buyers (52%), the Labour government (35%), the previous National government (24%), and banks (22%) as factors that have driven the increase in house prices.

Regarding government action, 42% of the respondents agreed that they should forcibly bring house prices down to pre-COVID-19 levels, compared to 31% who disagree – with strong agreement higher among New Zealanders age 18 to 39, non-homeowners, and those with an annual household income of $50,000 to $100,000.

Read more: Crockers and Tony Alexander team up to reveal latest investor insights

OneRoof editor Owen Vaughan commented that it was not surprising that house affordability has become a critical issue for Kiwis because the “jump in house prices in the last 18 months has fuelled concerns among many that the market is out of control” – with the national average property value having risen $225,000 in the last 12 months alone to just over $1 million.

“The survey results show there is a lot of uncertainty about the current state of the housing market and, concerningly, suggests that Kiwis are polarised around house price levels,” Vaughan said.

Meanwhile, independent economist and OneRoof columnist Tony Alexander said what’s surprising was that 52% of the respondents still said “overseas buyers are responsible for house prices doubling in the past seven years, given there has been a ban on almost all foreign buying since late 2018 and only 40% of the price doubling since 2014 occurred before the ban. A larger 62% of people blame investors for house prices doubling, and that seems accurate from my own analysis.”

In another joint survey, Alexander further revealed that a net 56% of real estate agents who responded to the survey reported an increase in house prices in November, with a net 18% claiming that they felt prices rose in their area, down from a net 60% in the previous month and equal to the reading in late May 2020 as the country emerged from the first COVID-19 lockdown.

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