Some readers have been looking for data on the 'real' change in house prices over a long time frame.
Their thought is that this will show how different the current sharp run-up in nominal prices the recent data is from historical precedents.
But it doesn't look like that is the case.
Finding data over a long period is not easy. But Statsitics NZ has a Long Term Data Series where annual, national data can be sourced. It is available in their G.6.1 series from the AREMOS set. That runs from 1989 to 2004 but can be accuratelty extended by an earlier index of the same series, and a later reference to REINZ data that accurately mirrors the AREMOS data.
The full 1963 to 2016 series is listed below.
These median house prices can be adjusted using the RBNZ Inflation Calculator to derive 'real' 2016 prices.
The nominal run-up in house prices is familiar and quite spectacular.
Applying the inflation deflator and recalculating all prices to 2016 levels does smooth out some of the rise.
But when you look at the annual change in real house prices, you find that current increases in fact seem quite 'normal' in New Zealand's history.
Here is the data for these charts.
|Real house price inflation|
|based on AREMOS||price||change|
|NZ$ nominal||Index||NZ$||% pa|
As someone who was around in the 1960s and has memory of the period, the early prices above resonate as realistic to me.
Another thought: House prices are actually just a proxy for affordability. But they are not a good one because they are incomplete. Incomes, tax rates, and interest rates all have as much to say about 'affordability'' often more. And recently, we can add regulatory limits, like LVR standards.