Population growth coupled with an undersupply of dwellings is creating long-term support for housing demand in Australia, according to a report in The Australian.
While this support is being temporarily offset by rising interest rates and high house prices, it’s a much brighter picture than what is being experienced in New Zealand.
Australia’s stronger economy and higher wages are encouraging more people to cross the Tasman to live which is weakening New Zealand’s already struggling housing market.
According to Statistics NZ, only 70 people arrived in New Zealand in June on a seasonally adjusted basis – its lowest migration level since late 2008.
Meanwhile, the country is losing greater numbers than it is receiving with the majority leaving for Australia.
“This does not augur well for the housing market and domestic spending,” said ANZ Bank economists, as reported in Stuff.com.au.
The link between migration and economic growth, housing and retail sales is well established in New Zealand. During the late ‘90s house prices slumped from 10% to zero in the wake of trickling migration.
Rising interest rates have combined with falling demand due to low migration to create a negative housing picture.