What were some causes of the housing bubble?

Housing bubbles are temporary periods of months or years characterized by high demand, low supply, and inflated prices above fundamentals. These bubbles are caused by a variety of factors including rising economic prosperity, low interest rates, wider mortgage product offerings, and easy to access credit.

Why is there a housing crisis in NZ?

Farha said New Zealand was breaching its obligations under international human rights treaties, and concluded: “The housing conditions – high rates of homelessness, inaccessible housing stock, unaffordability and escalating rents, substandard conditions including overcrowding, a lack of security of tenure for tenants.

Does New Zealand have a housing bubble?

New Zealand has the most bubbly house market in the world, according to a ranking by Bloomberg Economics. Bloomberg ranked the world’s frothiest housing markets based on key indicators such as the price-to-rent ratio, price-to-income ratio, price growth and credit growth.

When did the New Zealand housing crisis start?

A 2016 study found evidence of a bubble in the New Zealand housing market from 2003, which stalled in 2007/8 with the impacts of the global financial crisis. A second bubble appeared in Auckland in 2013, and until 2015 there were no notable spillover effects to other regions.

How is the property bubble affecting New Zealand?

The property bubble has produced significant impacts on inequality in New Zealand, which now has one of the highest homelessness rate in the OECD and a record-high waiting list for public housing.

Which is the country with the highest housing bubble risk?

For this indicator, there are five markets that stand out as having fast-rising prices: Portugal (131.8), Ireland (127.6), Netherlands (121.9), Canada (124.1), and New Zealand (121.9). The latter two (Canada/New Zealand) have appeared near the top of all three bubble indicators, so far. 4. Credit to Households (% of GDP)

What was the main cause of the housing bubble?

According to Wachter, a primary mistake that fueled the housing bubble was the rush to lend money to homebuyers without regard for their ability to repay. As the mortgage finance market expanded, it attracted droves of new players with money to lend.

Why are house prices so high in New Zealand?

Since the early 1990s, house prices in New Zealand have risen considerably faster than incomes, putting increasing pressure on public housing providers as fewer households have access to housing on the private market.