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Property market heat no surprise: English

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Property market heat no surprise: English

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Average house prices have risen nationally by 1.3 percent in the last four years (file)

Average house prices have risen nationally by 1.3 percent in the last four years (file)

By Pattrick Smellie

Household incomes have increased by a third in the last four years, while average house prices have risen nationally by only 1.3 percent in the same period, making recent real estate market buoyancy unsurprising, says Finance Minister Bill English.

Appearing before parliament's finance and expenditure select committee today, Mr English appeared to have prepared the figures in advance for questions on the apparent heat in the Auckland housing market, where average prices have risen above pre-GFC peak levels.

"House prices on average have moved up one per cent in nominal terms. Disposable income is up a lot over that period," he said.

"We wouldn't be surprised to see a bit more interest going back into the housing market", especially with the lowest interest rates in 40 years.

Mr English tried to bat away opposition politicians who pressed him on forecasts from the Treasury, Reserve Bank and the International Monetary Fund of an unsustainably high current account deficit with the rest of the world over coming years.

He cited the Christchurch earthquake as adding around one percentage point to the forecasts, while expressing a personal opinion that the outlook for New Zealand was better than forecasters believe.

"I'm just a bit more optimistic," he said, since he doubted New Zealand would return to historic levels of debt accumulation.

"The fact is we are in a world that's pretty different because everyone's reducing debt."

Households were saving more, which forecasters had originally doubted would happen, and New Zealand corporate balance sheets were stable.

While public debt was growing in part because of borrowing to cover quake rebuild costs and to lean against the impact of the global recession, the government remained committed to a budget surplus by in the 2014/15 financial year.

The high New Zealand dollar was a "signal from the world" that New Zealand had "sound prospects of producing stable yields compared to other countries".

"Our problem is one of success."

The New Zealand economy would remain "patchy" and unpredictable. Growth in the first half of this year had been stronger than forecast, while the second half was turning out to be weaker than anticipated.

NZN

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Comments

14/11/2012 8:50:22 p.m.

Dan wrote:

How on earth has the average household income increased by a third in the last four years? Is it because the billions of dollars of tax cuts have skewed the results?

14/11/2012 6:23:00 p.m.

eddie wrote:

I'm a national voter, and what English says is just crap...raised by a third?? WTF...that's 33.3%...this guy will have to explain what the hell data he's looking at as it's wrong/rubbish/bunkum/crap!, sounds more like lies he's saying and an explanation better be truthful or an apology needs to be given...perhaps he's looking at CEO salaries?

14/11/2012 5:29:19 p.m.

pat wrote:

English says from 'planet key' that incomes have increased by a 3rd in the last 4yrs,wtf,you tell that to those who are not from the elite block of nz.
Those buying the homes are his favoured
millionaires,billionaires,etc there would not be many from the ordinary folk,who are just trying to make ends meet,look at the homeless levels in auckland and elswhere in nz,then tell us our incomes have increased by a 3rd,
more spin from the kings of spin.

14/11/2012 4:51:50 p.m.

Geoff wrote:

"Household incomes have increased by a third in the last four years, while average house prices have risen nationally by only 1.3 percent in the same period" Excuse me!!! Are you kidding me. How can you believe this, reprint it, let alone challenge it. If you look at Quotable Value's website, http://www.qv.co.nz/aboutus/pressreleases/Spring+buyers+keen+but+supply+tight+-+8+November+2012.htm it shows a 10%+ in real terms over the last 4 years. Bill is one year out. He is also out-of-touch. 33% increase in household incomes? Seriously? For MP's maybe....

14/11/2012 3:50:33 p.m.

Greg wrote:

Household inncomes increased by a third in the last four years, has Bill been delving into weetbix packet cards for these quotes, unless he just means his income. We have a unbalanced housing market because of overseas buyers flooding the market. Income in NZ has effectively gone down except for CEOs and managers.