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New Zealand Housing Markets: Just a Bit-Player in the A-League?

Author

Listed:
  • Arthur Grimes

    (Motu Economic and Public Policy Research, University of Waikato)

  • Mark Holmes

    (University of Waikato)

Abstract

House price trends in each of New Zealand and Australia are frequently discussed as national level developments. Sub-national developments are also important, especially where regions display idiosyncratic trends driven either by demand factors (differential income patterns) or by supply factors (geographical or regulatory restrictions). At a broader scale, it is possible that the New Zealand housing market, or a specific regional housing market (e.g. Auckland), is part of a broader Australasian housing market. If this were the case, New Zealand house prices would converge to a broadly stable ratio of house prices in Australia. One reason this could occur is if international macroeconomic and asset price trends dominate housing market outcomes. New Zealand authorities may then be relatively powerless to control the major real determinants of house prices through regulatory or other policies. We extract the major drivers of house prices at regional levels within New Zealand and Australia to examine the degree of differentiation across regional housing markets. While some minor regional differences are apparent, the evidence points to the dominance of a single trans-Tasman housing trend.

Suggested Citation

  • Arthur Grimes & Mark Holmes, 2010. "New Zealand Housing Markets: Just a Bit-Player in the A-League?," Working Papers 10_07, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:10_07
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    References listed on IDEAS

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    Cited by:

    1. Ryan Greenaway‐McGrevy & Arthur Grimes & Mark Holmes, 2019. "Two countries, sixteen cities, five thousand kilometres: How many housing markets?," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 353-370, February.
    2. Allan, Corey & Kerr, Suzi, 2013. "Examining Patterns in and Drivers of Rural Land Values," 2013 Conference, August 28-30, 2013, Christchurch, New Zealand 160191, New Zealand Agricultural and Resource Economics Society.
    3. Ryan Greenaway-McGrevy & Peter C.B. Phillips, 2016. "Hot property in New Zealand: Empirical evidence of housing bubbles in the metropolitan centres," New Zealand Economic Papers, Taylor & Francis Journals, vol. 50(1), pages 88-113, April.
    4. Paul Thorsnes & Robert Alexander & David Kidson, 2015. "Low-income housing in high-amenity areas: Long-run effects on residential development," Urban Studies, Urban Studies Journal Limited, vol. 52(2), pages 261-278, February.

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    More about this item

    Keywords

    House price convergence; international housing markets; Australasia;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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