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Lenders to consumers are having to take into account all potential changes in an applicant’s income and that is hitting people intending to take maternity/paternity leave along with those approaching retirement.

There are five strong forces acting to pull back the level of intensity of buyer demand for residential property at the moment. But just because the boom has ended does not mean a crash is on its way.

The Reserve Bank have recently invited people to make submissions on their proposal to introduce debt to income requirements which banks must apply to new borrowers.

With investors backing off it is understandable that the pace of increase in house prices has slowed down. In the six months to September 2020, average house prices around New Zealand rose by just 4%, including a 3% fall over the April-May months.

On average, NZ house prices have risen by 35% since March 2020 when we went into the first nationwide lockdown. This week we're focusing on the growing list of reasons why the pace of house price inflation will slow quite sharply over 2022.

I know from experience that accurately predicting house price movements over short periods of time is impossible. But one can balance the various factors in play and see what the trend seems to be and where it may be heading.

The government this week clarified details of its housing tax policy changes announced on March 23, and they were slightly less bad than expected.

Nationwide average house sale prices rose by 2% in August. This followed a 2.4% rise in July, 1% gain in June, 0.8% rise in May and just a 0.5% rise in April.

Now that we are experiencing lockdown again, can we expect the same things to happen in the residential real estate market and economy as last time? No. There are some key differences between this situation and that of March 2020.

I recently wrote about the end-game being underway for the three decade period of high average house price rises. I still remain of that view, but for now the market retains considerable strength.

There are a growing number of factors in play which suggest that while demand for housing will remain firm, we've entered the end game for the period of strong house price rises well exceeding the rate of growth in household incomes.

Two week’s ago expectations for interest rate changes in New Zealand took a leap up in response to the June quarter inflation number coming in 0.5% higher than anticipated. This is a very rare event and the signal it has sent is that the pace of growth in our economy is too strong for the Reserve Bank to be confident of containing inflation below 3%.