New Zealand on Tuesday introduced a raft of measures to cool its red-hot housing market, slugging investors with new taxes and promising to boost supply after housing affordability fell to its lowest ever.
Westpac Bank said the moves could see home prices settle around 10% lower in the long term, with potentially greater swings in the short term as some investors exit the market. New Zealand's success in combating the coronavirus has fuelled an already hot property market, as returning Kiwis and investors parked their funds in real estate, pushing house prices up 23% in just 12 months, far ahead of wage growth.
The policy was another KiwiBuild, Collins said, referring to an earlier project by Ardern to build 100,000 affordable homes that was scrapped in 2019.ANZ Bank chief economist Sharon Zollner said the measures were a bold move given how many New Zealanders had invested in property. The New Zealand dollar fell to a three-month low as the reforms cooled policy tightening expectations. The kiwi , lost as much as 1% and traded at $0.7093 during the Asian afternoon.