Are returning Kiwis to blame for high house prices as the Finance Minister says. Short answer - No.
This week a row has erupted (again) over who or what is to blame for out-of-control Auckland house prices. "October 2020 will go down in housing history as being the point in time when Auckland region's median house price hit the million-dollar mark for the first time – something no one anticipated or expected just six months after the entire country came out of lockdown" said REINZ chief executive Bindi Norwell.
Finance Minister Grant Robertson said yesterday that soaring house prices in Auckland boil down to a "perfect storm" of low interest rates, a large number of returning Kiwis and a lack of housing supply. "We obviously do have low interest rates at the moment but you combine that with the fact we've got a large number of returning New Zealanders coming into the market" he said, referring to the influx of returning Kiwis fleeing COVID-19.
But the net population gain from migration, including returning NZ citizens, was just 1,700 in the five months to August 2020, down from 21,500 the previous year. On 12 October 2020, a Statistics NZ population indicators manager said that "Monthly migrant flows remain well below levels in previous years" .... "COVID-19 border and travel restrictions, along with capacity constraints in managed isolation and quarantine facilities, continue to limit people's ability to travel". Stats NZ estimated that in the 12 months to August, there was a net population gain of 71,500 people from migration, with 98% of that gain occurring over the 7 months prior to border restrictions being introduced.
Looks more like the Reserve Bank of New Zealand's $100 billion quantitative easing program on top of the inability of both National and Labour to solve the problem of increasing the supply of affordable housing is more to blame, rather than a tidal wave of returning expat young Kiwis. They can't even get home to visit their parents for Christmas!
For sources see: