Reserve Bank Bulletin looks at divergence in house prices between Auckland and regions
The Reserve Bank today published a Bulletin article, ‘New Zealand house prices: a historical perspective’(PDF 651KB) that provides historical context to the current divergence between house price inflation in Auckland and the rest of New Zealand.
The ratio of Auckland house prices relative to those in the rest of New Zealand has trended upwards since 1981. The extent of the increase in this ratio since 2009 is unprecedented. An upward trend in this ratio might be expected over time, but it is not clear how steep that trend should be, whether it is time-varying, or whether it will persist.
Historically, Auckland house prices have trended upwards relative to those in the rest of New Zealand but in instances when this divergence has become especially large, it has reversed to some extent. Corrections in the past have occurred both through prices in the rest of New Zealand catching up to those in Auckland, and by Auckland house prices declining to levels more consistent with those elsewhere.
More information: Reserve Bank Bulletin
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