Housing has been a hot topic in New Zealand for years, but things have heated up in recent weeks as house prices have dropped, highlighting just how high prices have gone, and making many wonder how low they could go.
Now, a new report has examined just why it is so difficult to predict house prices in New Zealand - and what factors contribute to the instability in the market.
Last month, a report was released by the Housing Technical Working Group - made up of members from the Reserve Bank, Treasury and Ministry for Housing and Urban Development - looking into factors that have influenced house prices over the past 20 years in New Zealand.
The report, which focused on the Hamilton and Waikato area to draw conclusions for the rest of the country, found that the tax system, falling interest rates around the world, and restrictions on the supply of land have been the biggest contributors to New Zealand's house prices - with population growth and construction costs, often touted as influencing prices, having only a modest impact.
