A S H L EY CHURCH: HAVE WE S E E N TH E LATEST OF NZ’S B I G H O US E PRICE J UMPS? Ashley Church
COMMENT: I’m always extremely uncomfortable at being introduced as a “property expert” and prefer to be described as a “property commentator” – a term which more accurately reflects that my views are simply opinions. That’s important because, as much as some of us have been observing the market for a long time, we’re all always at risk at being influenced by our own beliefs and worldview and allowing these to colour our judgement. In my own case, while I’m proud of the high degree of accuracy of my annual predictions going back many years – I’m also conscious that, occasionally, the views expressed in some of my regular columns turn out to be wrong. For example, in an article I wrote back in October 2020 I made the argument that, while mortgage interest rates would eventually increase from their historically low levels, they would take a long time to do so and that we would have plenty of warning. As predicted, they’re now starting to rise, but at a much more rapid rate than I suggested. As a result they’ve impacted on market confidence which, to a large degree, is why we’re seeing the current uncertainty in the property market.
14
03 June 2022
But as much as I’m cautious about predictions of where the market will go in the future, I’m much more bullish about the views I express regarding what the market has done in the past. Why? Because historical market behaviour provides a rich reservoir of data and knowledge from which we can learn and, while past market performance doesn’t guarantee future performance, it can absolutely provide a valuable guide from which we can draw useful parallels. All of which is why I was surprised to see a recent article on OneRoof in which readers were advised not to count on prices doubling again over the next 10 years. The commentator was referring to a wellknown view, among Kiwi property stalwarts, that New Zealand house prices broadly double every 10 years. It’s a view I happen to agree with – albeit with some pretty strong caveats. Firstly, it’s not an exact science. While some parts of New Zealand have, indeed, doubled every decade since the 1980s – others have increased in value much more quickly, while others have grown in value at a slower pace – so the observation is a generalisation.
