A senior Labour MP has put his reputation for predicting the future on the line, saying this time next year house prices will no longer be spiralling out of control.
Prices have soared in the past year, the nationwide average (mean) now above $900,000 according to Quotable Value. The Real Estate Institute of New Zealand, which tracks the median price, had it at $810,000 in April - up 19.1 percent in a year.
David Parker told The AM Show on Friday a record number of homes were built in the last 12 months, and more of them in the affordable range than before.
"Prices of new housing are being more distributed towards lower-cost housing. We have made that shift."
REINZ's median price in April, though eye-watering compared to even just a year ago, was down on March when it was $826,000.
"You see all these three-storey apartments going up in Auckland - that's one of the keys. I'm personally reasonably confident - you didn't believe me on vaccines - I reckon by this time next year we'll be turning a corner. We'll have two years in a row of record house builds."
Last year, before there were even any COVID-19 vaccines, Parker predicted New Zealand would start its vaccine rollout by June this year - it actually started in February.
"You are seeing lower-cost housing being built. A few years ago we were only building McMansions."
While the 41,028 consented homes in the year to March is a record, ahead of the 40,025 built in the year to February 1974, New Zealand's population has increased about two-thirds since then.
The record build hasn't stopped prices rising however, with some economists saying prices won't stop going up until interest rates come down.
In late 2017 Finance Minister Grant Robertson said he didn't want house prices to drop, but only rise 2 or 3 percent a year. At the time, the median price was $540,000 - it's gone up 50 percent since then in just three-and-a-half years, but Labour still doesn't want them to go down.
"I want them to stabilise, and over time them to settle not by going down," said Parker, calling the recent rise a "little blip".
"They would go up at less the rate of inflation. I think the recent peak will go out of the system... None of us want prices to collapse because that has other economic problems - people lose their jobs and the economy goes down."
Parker also denied figures in the first Annual Report for the Child and Youth Wellbeing Strategy, released on Thursday, showed an increasing number of children are living in houses where more than 30 percent of the income is going on housing - 36 percent, up from 35 percent a year earlier. He said that was in the "margin of error".
National MP Simon Bridges, appearing on The AM Show with Parker, said high rents were a big driver of the terrible poverty statistics.
"The reality is a lot of barmy policy - well-meaning policy - has pushed rent that way. So if you're a family, you talk about a family of 10 and your rent's gone up a couple of hundred bucks, you've got no money for food."
Parker said rents haven't been going up faster than usual, and they haven't. Trade Me data released this week showed rents have gone up 4 percent in the past year. According to Ministry of Business, Innovation and Employment data, in the past 10 years rents have gone up about two-thirds - an annual rate of just over 5 percent. They stalled during the rent hike freeze last year, but bounced back quickly once it was lifted.
"You guys wouldn't admit there's a crisis, then every time we do things, you criticise the things we do," said Parker. "We've done a huge amount across housing and it's working. It's not getting worse."
