News

A commentary by Dave Fermah

21 May 2007

I read the conflicting media reports about a housing price bubble and the impending fall, how there’s a shortage, how it costs so much more now and then I also read that sales are at high levels with strong volumes and continuing high levels of building consents, it gets rather confusing. Where are house prices headed? Why does it cost so much more for a new house? It isn’t hard to tell where new housing prices are headed, save an economic catastrophe, or what houses we will be living in over next five to ten years.

Why is new housing so expensive seems a good place to start. A combination of factors beyond the control of Mr Joe Average have conspired to drive the future price of new entry level housing up. It’s actually not hard to work out why new houses have gone up around $30,000 to $100,000. Unfortunately this helps drive up older housing prices.

Read more: Why new house prices are higher than they should be