Budget 2021: Has housing peaked?
Wellington, 20 May 2020 — “Budget 2021 would suggest house prices have peaked,” says Deloitte Chief Executive Thomas Pippos.
The Budget, along with Treasury, estimates that annual house price increases will peak at 17% in June 2021, before dropping over the forecast period to 0.9% in June 2022, as a result of the Government’s interventions and macroeconomic tools. Of note, it’s not estimated that house prices will fall, as last seen during the Global Financial Crisis.
“Time will tell as the markets haven’t followed traditional thinking to date, in part because of a fall in interest rates and comparable yields, but it’s inevitable that gravity will halt pricing as some stage.
“What’s also inevitable, is that baring the asset bubble popping, is that future investment gains will be anticipated to be lower over this next period than they have been in the past, given gains already baked into asset values,” said Mr Pippos.
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