Infometrics' chief forecaster says the 2020s are shaping up as the weakest decade for house-price growth in about 70 years, challenging a familiar rule of thumb.
Modern Auckland houses along a suburban street with a green cycle lane.
New Zealand's familiar claim that house prices double about every 10 years is under pressure, with Infometrics chief forecaster Gareth Kiernan saying the 2020s are shaping up as the weakest decade for house-price growth in about 70 years. Prices have lifted only about 10 percent so far this decade, a sharp contrast with the 113 percent increase in the 2010s and the 107 percent rise in the 2000s. That does not mean housing is suddenly cheap. It means the old shorthand is becoming a poor guide to today's market.
Kiernan's long-run calculation is useful because it separates memory from evidence. He found that since 1950, a majority of overlapping 10-year periods did show nominal house prices doubling or more. But that still leaves many periods when they did not, and it does not explain why the increases happened. Inflation, interest rates, credit conditions, supply constraints, wages, migration and tax settings all shape the result. A phrase that sounds like a law of nature can hide the actual drivers of the market.
The current decade has been unusually disruptive. Prices surged around the pandemic period, then fell sharply as interest rates rose and borrowing power weakened. Since then, the market has stabilised in many places rather than racing back to peak growth. Reserve Bank housing data released this month continues to track sales, values and related indicators as part of a wider economic picture. The important signal is that housing is no longer being lifted by the same long fall in interest rates that supported prices for much of the previous generation.
For buyers, slower growth can be a relief and a warning at the same time. It may reduce fear of missing out and give households more time to compare properties, negotiate and think about debt serviceability. But prices remain high relative to incomes in many areas, and mortgage costs still matter more than the sticker price alone. A flat or slow-growing market does not automatically solve affordability if deposits are hard to save and repayments remain large. The quality of the purchase decision becomes more important when capital gains are not doing the heavy lifting.
For sellers and investors, the change challenges old assumptions. If a property is not likely to double quickly, returns depend more heavily on rent, maintenance costs, tax treatment, insurance, rates and the price paid at the start. That may make speculative buying less attractive and put more focus on cashflow. ANZ's property commentary has also argued that future house-price growth may be slower than the long-run average if the factors that drove past gains are weaker. That view fits a market where interest rates are no longer falling decade after decade.
The social effect could be significant. Slower nominal house-price growth may reduce the gap between asset owners and people trying to enter the market, but only if incomes, supply and infrastructure also improve. If prices merely pause at high levels, inequality remains. Kiernan's warning is therefore not just a market note. It is a reminder that New Zealand should stop treating rapid house-price inflation as normal or inevitable. A healthier property conversation would ask what level of growth is sustainable, who benefits from it, and whether housing is serving households before speculation.
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