Housing crisis: Everything points towards a correction in the market in 2022 – Economist

With the borders closed for nearly two years now thanks to COVID-19, immigration has stopped, a far cry from the days when tens of thousands were arriving at a time when construction was at an all-time low.

“We started the lower construction… at the same time we were seeing population growth over a number of years of about 90,000 per year – 30,000 base population growth, natural increases; plus about 60,000 immigration per year. At the moment we have no immigration. …there was a massive transformation.”

The nation’s borders aren’t the only ones that potential immigrants are waiting to open. Auckland borders drop on December 15Bagheri expects 2022 to see residents flee to cheaper areas.

“I think Auckland is going to see a very significant loss of intra-regional migration in the next 12 months… Post COVID, I think we are going to see a very large acceleration of people moving from Auckland into the regions, also at a time when building approvals in Auckland have gone up significantly.”

This, on top of the Reserve Bank moves to Tighten lending and raise interest rates and the government Tax changes to discourage speculation – not to mention Unaffordable absolute costs The market should experience a long-awaited contraction in 2022, says Bagri.

“I think it’s a good fit for the tough times in the latter part of 2022 that some people don’t like, but I think it’s basically a good story about getting the market back into a little more equilibrium. House prices are going to come down…valuations are stressful, you have a Reserve Bank regulator asking banks to rein in. Things are reining in, the banks are reining in, you have a fundamental shift in the housing supply situation in Auckland, interest rates are starting to go up…and we have these tax changes.The tax changes have really changed the investor market.

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