Despite speculation early in 2020 that the COVID-19 pandemic could cause house prices in New Zealand to tumble, the market instead went bananas.
Record-low interest rates have led many to buy up big, pushing up prices. A CoreLogic report found that in the last three months of last year, average property values rose 6.1 percent. Overall in 2020, prices jumped 11 percent, while the average price in Auckland is now more than $1 million.
The increase in prices is shutting many potential first-home buyers out of the market.
Prime Minister Jacinda Ardern said on Saturday that the number of investors in the market is part of the issue.
"What we want them to think about doing is how can you contribute to the productive economy in New Zealand? By going into an overheated housing market, it makes it so much worse for others and you won't necessarily get the long-term benefits that we'd like you to get."
However, among other reasons prices have surged is the removal of loan-to-value ratios in 2020, the influx of people returning to New Zealand during the pandemic looking for somewhere to live, and continued lack of supply.
A report from Stuff this week found that nearly 80 percent of landlords own just a single property and less than six percent own four or more rentals.
"The vast majority of investors are mum and dads, not huge scale investors with multiple properties. Most are ordinary people who simply want to try and build up a nest egg for their retirement," the outlet reported NZ Property Investors Federation executive officer Sharon Cullwick as saying.
Do you agree that property investors are making it 'so much worse for others' in an 'overheated housing market'?
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