Property listings in February were the lowest since records began 16 years ago. It coincides with a rise in mortgage arrears, signs an economist says of a looming recession. Zane Small reports. ➡️ SUBSCRIBE:
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According to a recent report by Newshub, an economist has warned of a possible recession in New Zealand as property listings have hit their lowest level in sixteen years. The report states that as the number of homes on the market falls, it is likely to lead to a slowdown in the economy.
The data shows that there were just 17,836 listings in April, which is the lowest level since 2005. This is down from the average of 22,246 listings seen over the past decade.
The report quotes Westpac Senior Economist Michael Gordon, who states that “the lack of houses available for sale is providing a growing constraint on the market, dampening sales activity and injecting a note of caution into buyers’ price expectations.”
Gordon goes on to say that this lack of supply is due to a number of factors, including low levels of new construction, government policies that have restricted foreign investment, and a strong preference among local buyers to hold onto property assets.
The report also highlights the impact of COVID-19 on the property market, with restrictions on international travel affecting the number of overseas buyers, and border closures leading to a slowdown in the construction industry.
The warning of a possible recession is concerning for New Zealand, which has already been grappling with the economic impact of the pandemic. While the country has been successful in containing the virus and has largely returned to normal, the global economic outlook remains uncertain.
Despite this, the government has recently announced a number of measures designed to help the housing market, including a $3.8 billion Housing Acceleration Fund, which aims to speed up the delivery of new homes.
However, with property listings at their lowest point in over a decade, it remains to be seen whether these measures will be enough to prevent a broader economic slowdown. As Gordon stated in the report, “The housing market has been one of the few bright spots in the New Zealand economy over the past year, but the latest data suggests this may not last.”
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