Westpac Anticipates 10% Growth in Housing Prices, 3% More Than Originally Forecast
Westpac’s Chief Economist, Dominick Stephens, announced this week that he was revising the national house price forecast. Stephens originally anticipated that house prices would rise by 7% in New Zealand in 2020, however, this figure has now been raised to 10%.
“The market has proved slightly stronger than we anticipated. We now expect the current upturn to culminate at a rate of 10 per cent annual house price inflation in the middle of the year,” he wrote in the latest edition of NZ Home Truths.
“New Zealand construction activity has ramped up substantially while net migration has steadily declined. However, house prices have still shot higher. We think that has been due to a big reduction in interest rates combined with the cancellation of earlier plans to introduce a capital gains,” he wrote.
2020 has already been a record year for the housing market in New Zealand. The house price index has risen 7% in the past year, resulting in a record high of 2922. Auckland’s housing sales have also risen by 9.7% and sales across the country have increased by 0.9%.
Sales aren’t the only thing rising in Aotearoa, either. TradeMe reported “record-breaking rents after the national median rent rose 4 per cent to a new high of $515/week. The summer rental rush was in full swing in January and every region saw an annual increase in rent. The number of enquiries rose 86 per cent on December. Wellington is still the most expensive region to rent with the median weekly rent rising $25 on last January to $575 per week.”
It seems January has set quite the tone for the 2020 New Zealand housing market. Whether or not the trend will continue throughout the rest of the year remains to be seen, however, it’s been a while since New Zealand has seen as promising a start as last month.