{"id":136,"date":"2025-07-17T09:37:42","date_gmt":"2025-07-17T09:37:42","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/136\/"},"modified":"2025-07-17T09:37:42","modified_gmt":"2025-07-17T09:37:42","slug":"new-zealands-once-in-a-generation-house-price-crash","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/136\/","title":{"rendered":"New Zealand&#8217;s &#8216;once in a generation&#8217; house price crash"},"content":{"rendered":"<p>During the Covid-19 pandemic, New Zealand experienced one of the world\u2019s largest house price booms, which pushed median home values to a record 11.2 times median household incomes, according to Demographia.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/Capture-275.png\" width=\"660\" height=\"246\" alt=\"Median multiple by country - 2021\"\/><\/p>\n<p class=\"wp-caption-text\">Source: 2022 Demographia Housing Affordability Survey<\/p>\n<p>Since then, New Zealand has experienced one of the world\u2019s biggest housing crashes, which has significantly improved the nation\u2019s housing affordability.<\/p>\n<p>On Tuesday, the Real Estate Institute of New Zealand (REINZ) released its house price index for June, which declined by 0.3% in June:<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/REINZ-HPI.png\" width=\"707\" height=\"578\" decoding=\"async\" loading=\"lazy\"\/><\/p>\n<p>Home sales turnover has also continued to fall, dropping 4.8% in June (seasonally adjusted), following an upwardly revised 0.8% fall in May.<\/p>\n<p>\u201cOverall, these indicators suggest the housing market has shown little movement despite a sizeable reduction in mortgage interest rates\u201d, major bank ASB said.<\/p>\n<p>Advertisement<\/p>\n<p>\u201cThe decade-high inventory and no signs of significant cooling in new listings have been widely identified as major factors dampening the recovery of house prices to date. Current inventory is now sitting at 32.7k (seasonally adjusted), about 1.8 times higher than during the last house price boom in November 2021\u201d.<\/p>\n<p>\u201cOur preferred \u201cmarket tightness\u201d indicator (as shown in the chart below) continued to ease further in the last two months, indicating that house sales turnover has failed to keep up with the increase in new listings, further widening the imbalance between supply and demand\u201d.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/National-housing-market-tightness.png\" width=\"660\" height=\"504\" decoding=\"async\" loading=\"lazy\" alt=\"National housing market tightness\"\/><\/p>\n<p>The following chart from Justin Fabo from <a href=\"https:\/\/www.antipodeanmacro.com\/\" rel=\"nofollow noopener\" target=\"_blank\">Antipodean Macro<\/a> shows that prices have crashed across all major markets in New Zealand.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/NZ-house-prices.png\" width=\"660\" height=\"556\" decoding=\"async\" loading=\"lazy\" alt=\"NZ house prices\"\/><\/p>\n<p>Advertisement<\/p>\n<p>When adjusted for inflation, real house prices have collapsed to pre-pandemic levels:<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/NZ-Real-house-prices.png\" width=\"660\" height=\"555\" decoding=\"async\" loading=\"lazy\" alt=\"NZ real house prices\"\/><\/p>\n<p>The ratio of dwelling prices to income in New Zealand has also returned to pre-pandemic levels:<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/NZ-house-price-to-income-ratio.png\" width=\"660\" height=\"576\" decoding=\"async\" loading=\"lazy\" alt=\"NZ house price to income ratio\"\/><\/p>\n<p>Mortgage repayment affordability has also improved materially, reflecting lower home prices and mortgage rates:<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/NZ-mortgage-affordability.png\" width=\"660\" height=\"582\" decoding=\"async\" loading=\"lazy\" alt=\"NZ mortgage repayment affordability\"\/><\/p>\n<p>Advertisement<\/p>\n<p>Thus, the sharp decline in prices has dramatically improved housing affordability in New Zealand.<\/p>\n<p>This is in stark contrast to Australia, where politicians have actively stimulated home prices through demand-side stimulatory policies such as the Albanese government\u2019s 5% deposit scheme for first-time home buyers, the expansion of the Help-to-Buy shared equity scheme, changes to lending rules that prohibit banks from including student debts in loan serviceability assessments, and various state government policies.<\/p>\n<p>Australia has actively added demand-side fuel to the housing bonfire, whereas New Zealand has not.<\/p>\n<p>Advertisement<\/p>\n","protected":false},"excerpt":{"rendered":"During the Covid-19 pandemic, New Zealand experienced one of the world\u2019s largest house price booms, which pushed median&hellip;\n","protected":false},"author":2,"featured_media":137,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-136","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=136"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/136\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/137"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}