CanNZ expect an Aussie-like revivalinhouse pric

Economist NERIDACONISBEE on what Kiwis can learn from the housing marketacross theTasman.

During the pandemic, both New Zealand and Australia saw very fast increases in house prices.And last year,both countries saw prices fall as interest rates started to rise. Australian house prices however arenow on the rise, with New Zealand continuingtosee declines. Does this mean that NZ houseprice increases arejust around the corner? Or is there something fundamentally different to NZ property markets that will hold back aturn in market conditions.

1

THE RESERVE BANK OF NEW ZEALAND HAS BEEN

FARMORE AGGRESSIVE ON MONETARYPOLICY

Akey difference between the Reserve Bank of New Zealand and theReserve Bank ofAustralia is thelevel of aggression in trying to tame inflation. RBNZ has moved alot faster at raising rates than the RBA.As a result, price falls have been greater in NZ than what has been seeninAustralia. Now NZ interest rates appear to have peaked, this is positive for houseprices.

2

POPULATION GROWTH IS LESS STRONG IN NZ

Australia’s population growth has gone back to prepandemic levels. This has been akey driver of price and rental growth -thereare now too few homes for buyers and renters. In comparison,NZ’s population growth has been moresubdued in comparison.

Migration to NZ however is starting to pick up again and is expected to accelerate morethis year.While this will put pressureonhousing demand, it willassist