Rising immigration levels will help New Zealand’s property market avoid a much feared bubble, the Chief Executive of the Real Estate Institute of New Zealand (REINZ) has proclaimed.
Last week, Harry Dent, an American economist, stated that years of excessive house price growth in the New Zealand property market will lead to the bubble bursting in the next couple of years, sparking price declines of between 30 to 50 per cent in some areas.
However, the REINZ’s Helen O’Sullivan has dismissed such claims, stating there is no immediate danger of a property price crash.
“The key question to me is always, ‘What would the trigger be for such a significant drop in property prices’?” she said. “When we’ve got migration increasing, we’ve got economic growth increasing, and New Zealand continues to export a significant portion of its produce to developing parts of the world, as opposed to just the industrialised nations, I just don’t see what would trigger such a collapse.”
O’Sullivan also argued that, outside of Auckland and Christchurch, property prices are still only increasing at a steady rate, describing prices as being “pretty static” in most areas. She also highlighted further predictions made by Dent in 2011 which predicted a crash in the Australian property market which never materialised.