21 May 2013

Warning migrant influx may push house prices higher

7:28 pm on 21 May 2013

An economist says an improving job market, including the Christchurch rebuild, is bringing more people to the country.

However, as more people move to New Zealand, one commentator is warning there is likely to be a surge in the housing market lifting prices even higher.

Statistics New Zealand says for the year to April there was a net gain of 4800 migrants. That is up on the previous year, where there was a net loss of 4000 people.

Bank of New Zealand chief economist Tony Alexander says by the end of 2013, there could be a net gain of up to 15,000 migrants.

He says the housing market is likely to come under more pressure and there is about three years before it could hit a bubble.

Mr Alexander says as more people shift to New Zealand, local residents will move to buy quickly and this could lead to a surge in the housing market.

"Now as we start to get some general media buzz about the migration numbers going up, it will add to the number of investors looking to buy the properties before the migrants do.

"There will be an extra surge in the housing market, driven by extra new investors."