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Housing market - house for sale - Source: ONE News -
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According to the latest Real Estate Institute figures house prices are up again, but many people are wondering for how long this time.
Investors are worried about the talk of a tax on rental property, which could bring prices crashing down.
For the year to October Southland's median price fell nearly 9%. It rose a little across Otago, was up 6% in Canterbury and was down at the top of the South Island in Nelson.
Wellington's 12.5% was the national high but in the likes of Palmerston North and New Plymouth in the lower North Island, it all went backwards. There was a ridge of positive prices from Hawke's Bay to Hamilton, peaking at 5% in Auckland. Northland's median price fell nearly 8%.
Westpac chief economist Brendan O'Donovan says there has been a spike in migration numbers, so there are more bodies about, however the number of houses being built is "woefully inadequate".
"At the same time, we've got super-low short term mortgage interest rates that's really given the market a head of steam," O'Donovan says.
It could easily evaporate - the government is talking about removing the tax advantages for higher earners who have been ploughing their money in houses.
"When the marginal tax rate was raised from 33 to 39% that added almost 20% to the value of houses, so on the flipside if marginal tax rates drop by a similar amount, it'll have a similar negative impact," O'Donovan says.
Landlords are already delaying investing in more housing, says Andrew King from the Property Investors Federation.
"A lot of the people I've been talking to are thinking, they are holding off, because they just don't know what's going to happen," King says.
His prediction is that the moment the government confirms any changes to tax on property, house prices will fall and keep falling for 12 months.
