Low interest rates & rapid population growth are set to keep housing demand soaring over the next few years, however price rises are set to fall off as supply eventually reaches a level closer to demand, Treasury says.
• Budget 2017 picks the QV house price index to be up by an annual 5.1% in the year to June 2017, lifting to 7.8% in 2018, then falling to 3.9%, 3.1% and 2.2% annually over 2019, 2020 and 2021. In early May, the latest QV house price index showed prices were flat over the last three months, with the annual change at 11%.
• Treasury said “House price growth is anticipated to pick up once more in 2018 then ease from 2019 onwards as supply increases to meet demand.”
• Residential investment growth is expected to fall from 6.7% in 2017 to 0.3% in 2018, before rising to near 9% through 2019 and 2020 – illustrating the increase in supply Treasury is hoping for.
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