When our property market is in the doldrums it is hard to see how things will change, but if history repeats itself as it has for over a century, prices could go through the roof in the 2030s, and maybe sooner.
Across the nation we see staff wanted signs and businesses closing because they can’t get staff; we experience shortages and queues. We hear organisations saying their productivity and growth are hampered because they can’t find staff. This must end up leading to growth in immigration, which will put pressure back on housing.
Don’t expect politicians to sit back and do nothing when they see everything from our primary sector to health sector facing critical staff shortages. When the average age of farmers and doctors, like other sectors, is over 60, there are hundreds of thousands who will retire in the next decade or so. Who’s going to do their work?
Whilst we love New Zealand the size it is and dread the consequences of any more pressure on our roads and public transport, I believe we are starting to accept that significant immigration is essential to maintaining the standard of living and services we expect.
It’s a first world problem and there’s a race for talent. We are far from winning and one of the reasons is housing. If an engineer in the UK wants to leave their $2M home and come here, we currently force them to be tenants until they have residency. It’s an unattractive proposition given they probably don’t want to sell their UK home until they can buy in NZ, nor do they want to rent it. I suspect the best migrants find another country and we get the next best.
Expect government policy to change, and as it does, we could end up with a bigger shortage of housing than we’ve had.
For now, there’s a bit of a Mexican standoff between buyers and sellers. One day that difference will be insignificant, given where prices will go as our borders open and inflationary influences shift to property.