The Ups and Downs of New Zealand House Prices

40 Pages Posted: 11 Aug 2006

See all articles by Viv Hall

Viv Hall

Victoria University of Wellington - School of Economics & Finance

C. John McDermott

Reserve Bank of New Zealand

James Tremewan

University of Auckland - Department of Economics

Date Written: July 2006

Abstract

This paper identifies the expansion and contraction phases of New Zealand's national and regional house prices, by employing techniques typically used to study cycles in real activity, the so-called Classical cycle dating method. We then enquire into the nature of the cycles, addressing five questions: (1) What are the New Zealand and regional house price cycles, and do the regional cycles differ from the national cycle?; (2) What are the typical durations, magnitudes and shapes of these house price cycles?; (3) Do cycles in house prices match cycles in economic activity, at either national or regional levels?; (4) Does it matter which of the two main sets of house price series are used? i.e. Quotable Value New Zealand (QVNZ) or Real Estate Institute of New Zealand (REINZ)?; and (5) Does the sample period matter? Findings are evaluated in the context of work by Grimes, Aitken and Kerr (2004), and Hall and McDermott (2005). Avenues for further research are suggested.

Keywords: House price cycles, regional business cycles, classical business cycle, New Zealand

JEL Classification: C22, E31, E32, R11, R15, R21

Suggested Citation

Hall, Viv and McDermott, C. John and Tremewan, James, The Ups and Downs of New Zealand House Prices (July 2006). Available at SSRN: https://ssrn.com/abstract=923705 or http://dx.doi.org/10.2139/ssrn.923705

Viv Hall (Contact Author)

Victoria University of Wellington - School of Economics & Finance ( email )

P.O. Box 600
Wellington, 6140
New Zealand

HOME PAGE: http://www.vuw.ac.nz/sef/pages/staff/VivHall

C. John McDermott

Reserve Bank of New Zealand ( email )

2 The Terrace
P.O. Box 2498
Wellington, 6011
New Zealand

James Tremewan

University of Auckland - Department of Economics ( email )

Auckland
New Zealand

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