The first lockdown in March 2020 showed erratic behaviour in many sectors. House prices were no exception and it was widely touted for values to decrease by 5 – 15%. Interestingly, this didn’t transpire. In a turn about 2020 became the year of the largest house price inflation in New Zealand’s history at 30%.

The 3 main factors were;

–  Official cash rate 0.75 in March 2020.

Money was cheaper and banks were offering low interest mortgages.

–  Removal of LVR’s (Loan to Value Ratio)

LVR’s were not stabilising house prices but posing obstacles for first home buyers.

–  The Reserve Banks indication to reintroduce LVR’s in March 2021.

 (this encouraged many first time buys and investors)

Can this happen again?

Over time many incentives have been discussed, implemented, altered, and imposed to check New Zealand’s house prices. Some of the these have had relative success. However, with the ongoing high demand in standing stock and new homes, the shortage of available property in many areas, we believe now is a great time to get into a new home.