Property prices will continue to rise in 2021 but will do so at a considerably slower rate than this year’s explosion, according to Quotable Value (QV) general manager David Nagel.
Nagel says that the market will cool when loan-to-value (LVR) ratios are reintroduced in March.
“I’m predicting we’ll see something more akin to 2019 levels of growth again, when prices increased by an average of 4-5 per cent nationally, as opposed to the rampant double-figure growth that we’ve witnessed during the back half of this year,” he said.
“A shortage of listings, record-low interest rates, and the looming re-introduction of loan-to-value (LVR) ratios means that the property market is in for a hectic summer yet. But when the LVRs do eventually kick back in just as the weather begins to cool in March, I expect the property market will start to cool as well.”
Nagel said forecasting Aotearoa’s economic recovery was difficult, with more lockdowns a possibility, even with the prospect of a vaccine, but 2020 had shown that property market is resilient.
“As 2020 has taught us, anything can happen. But what we’ve also learnt this year is that NZ’s residential property market is more resilient than many of us expected. While interest rates remain so low, it’s difficult – but certainly not impossible – to fathom a scenario in which prices would fall dramatically,” Nagel said.
“Until we address this country’s chronic shortage of housing, and I have been pleased to see that Auckland is on the right track now with record numbers of consents and work on new builds, we’re likely to have more buyers than we do houses, which is only going to keep prices up.”
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