Skip directly to main content.

Research and Policy

Quarterly Housing Sector and Housing Assistance Monitoring Report - June 2008

  1. International financial markets are still volatile as they continue to cope with the fallout from the collapse of the sub-prime mortgage market in the United States in August 2007. Internationally, investors are becoming more risk averse in the light of international financial developments and are winding back their exposure to smaller financial markets, such as New Zealand.
  2. Lending in New Zealand has slowed in response to high interest rates, the need for consumers to rebalance their financial situations, and the increasingly cautious approach to lending banks are taking. Consumption has dropped, contributing to a slowdown in growth. In response to the slowdown, by early September 2008 the Reserve Bank of New Zealand had reduced the Official Cash Rate from a peak of 8.25 percent to 7.5 percent. This has resulted in a decline in the exchange rate as some international investors move their funds to countries with more attractive interest rates.
  3. Challenging times for the household sector are also driving this slowdown. Households are focussed on paying back debt and combating higher food, fuel, electricity, and interest costs.
  4. The recent falls in the exchange rate and interest rates will soften the recession by providing improved returns to exporters and lower mortgage costs in the short to medium term. These changes are forecast to flow through to a strengthening economy in 2009.
  5. The decline in availability of household mortgage finance and easing of the housing market has resulted in a lower volume of sales and lower house prices as measured by the Real Estate Institute of New Zealand. House prices fell 5.7 percent in the year to August 2008. The national median selling price was down from $340,000 in July 2008 to $330,000 in August 2008.
  6. Over the last year rents rose at a rate slightly below the rate of inflation. In the longer term it is expected that rents will rise above the level of inflation.
  7. Government assistance through the accommodation supplement and income related rents for the June 2008 quarter was approximately $344 million. This resulted in a total annual increase of 5 percent in the June 2008 year
  8. After declining in the March quarter 2008, the number of accommodation supplement recipients increased in the June quarter 2008. This matched the number of recipients in the December quarter 2007. This was 1 percent higher than the number of recipients in the June quarter 2007.
  9. The total Corporation waiting list of applicants was 9,865 at 30 June 2008. Of this number, 2,469 are currently Corporation tenants applying for a transfer. Since June 2007, the total waiting list has remained steady.
  10. In the year to June 2008, the A segment of the Corporation waiting list has increased by 86 percent.
  11. The priority waiting list (the A and B segments) has increased to 3,985, up 12.9 percent from 3,529 in March 2007.
  12. Overall the waiting list has fallen by 16 percent between June 2006 and June 2008, however the change varies depending on the age of those waiting for houses. Those aged between 21 and 50 have decreased by more than the average. This could reflect the strong labour market and the ability of those of working age to raise their income and find non-Corporation housing. The number of those people over 60 years old on the waiting list has increased over the same period.

Skip page tools.

Note: You are reading this message either because you can not see our css files, or because you do not have a standards-compliant browser. Although the content of this site will be accessible in any browser, please consider upgrading to a web-standards compliant browser such as Mozilla to fully experience the design of this site.

Top.