Ray White Now New Zealand - September Edition - Page 17
Fundamentally , what happens to pricing is going to be dependent on two competing factors . The first is whether stock shortages continue ( pushing up prices ) and whether the greater restrictions on finance lead to a dramatic fall in borrowing ( to my next point ).
Finance restrictions could substantially alter the outlook
Auckland is the second least affordable city in the world , according to a 2020 study undertaken by Demographia and comparing household incomes to house prices at a global level . Since the study was done , affordability has become even more challenging . Access to finance is a major driver of house prices .
The RBNZ has already moved on restricting finance by adjusting loan-to-value ratios for people looking to get a loan . In October , they further plan to lower loan-to-value ratios and implement debt-to-income restrictions or interest rate floors . As to the ultimate impact on pricing , it will depend on whether we see more lockdowns , as well as the extent to which borrowers pull back with the restrictions .