Renters suffer in tight housing market (NZ)

Wednesday, 09 July 2003 

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Shortage of high quality homes for sale in Auckland causes jump in property prices; rents rising faster than salaries.

A property expert says a tight housing market is positive for the economy.

Auckland real estate figures show that a shortage of listings for high quality homes is causing a jump in property prices.

Massey University property studies professor Bob Hargreaves says the recent housing boom has been caused by homeowners either trading up or downsizing their properties.

He says the situation makes it harder for renters to get into the housing market. In addition, rents are increasing faster than salaries.

But Professor Hargreaves says the buoyant market has created an economic cycle known as the wealth effect, whereby property owners become confident consumers, due to the rising value of their homes.

2003 NZCity, IRN