By Lucy Craymer
WELLINGTON (Reuters) – New Zealand’s need to continue increasing housing supply to address housing affordability remains a concern, the International Monetary Fund said on Wednesday. , adding that land should be released to facilitate investment.
“Cyclical declines (in house prices) do not mean that the structural housing shortage has been resolved.” An IMF report following its Article IV review of New Zealand policy The statement said there was an urgent need to expand housing supply, including social housing, to improve affordability
New Zealand house prices have fallen by about since their November peak 2021 % as the central bank has raised the cash rate significantly to curb inflation. However, New Zealand still has one of the highest house price-to-income ratios in the world.
INTERNATIONAL CURRENCIES While prices have fallen, financial stability risks appear to be under control, the IMF report said.
It added that achieving long-term affordability depends largely on freeing up land supply and improving planning and zoning, and promoting infrastructure investment to enable rapid housing development and reduce construction costs and delays.
More broadly, the IMF said New Zealand’s and next year’s economic growth is expected to slow to 1% per annum, while inflation may gradually decline to between 1% and 3% .
“ Risks to the outlook arise from the external environment and the underlying need to tighten monetary and financial conditions,” it said.