Liam Dann: The great New Zealand house-price delusion

New Zealanders have a delusional attitude towards the housing market, argues Liam Dann. Photo / 123RF

As we say goodbye to 2021 and welcome in 2022, it's a good time to catch up on the very best of the Herald columnists we enjoyed reading over the last 12 months. From politics to sport, from business to entertainment and lifestyle, these are the voices and views our audience loved the most. Today it's the top five from Liam Dann.

The great NZ house-price delusion - March 28

It took years for New Zealand equity markets to recover from the 1987 crash - much longer than the rest of the world.

But it did. And with the help of schemes like KiwiSaver, our attitudes to sharemarket investing has matured.

Compare that with the delusional attitude New Zealanders still have to the housing market.

When it comes to housing, we treat the prospect of any price falls as some kind of social apocalypse.

We (almost) all agree that prices are rising too fast and house prices are over inflated but we can't seem to accept that they have to fall.

That mass delusion is manifest in the inability of either National or Labour politicians to acknowledge prices should fall.

Read the full article: The great NZ house-price delusion

When it comes to housing, we treat the prospect of any price falls as some kind of social apocalypse. Photo / Alex Burton

Interest in rates at record high - July 18

Interest rates are a triple whammy of interesting. They can earn you money, they can cost you money and they have magic powers to control the money supply, keep inflation stable and central bankers happy.

While interest rates are still technically near record lows, the rate of public interest in them seems to be at record highs.

Everyone has an opinion on them. Everyone is reading about them. Everybody is worried about them.

That's because they've finally started to rise, I guess.

Read the full article: Interest in rates at record high

Everyone has an opinion on interest rates. Photo / Getty Images

We are a polarised country - October 24

We need to collectively take a deep breath.

The next few months are going to be very tough. The bit where we opened up and learned to live with Covid-19 was always going to be.

I think we're a tough nation and we can get through it. In fact, I think we're a tough and compassionate nation. These are the qualities that will see us through.

Read the full article: We are a polarised country

An anti-lockdown protest at Auckland Domain. Photo / Brett Phibbs

New data highlights NZ's housing crisis challenge - February 16

For those who want to see the market cool, the outlook doesn't look much better for the year ahead.

Westpac's new Economic Overview forecasts that house price inflation will remain elevated at about 17 per cent this year.

"We are now forecasting 17 per cent house price inflation in 2021, due to ongoing low interest rates," said Westpac chief economist Dominick Stephens.

"But by the same logic, we continue to warn that when interest rates do eventually rise, house prices will fall."

Unfortunately that last statement doesn't point to a fall any time soon.

Read the full article: New data highlights NZ's housing crisis challenge

Housing costs were rising long before the pandemic property boom. Photo / File

Is the housing boom over? - November 7

The housing boom is over.

I don't know if that's official. I think the latest property market data is still a little inconclusive.

But Sir John Key called it last week. And that seemed to be a bit of a thing.

Key's comments - that rapid housing market growth is no longer sustainable - were hardly a revelation.

To be fair, they weren't meant to be.

Read the full article: Is the housing boom over?

Former PM John Key addresses media over Auckland housing issues in 2016. Photo / Dean Purcell