Tony Alexander Reveals What Makes House Prices Go Up | Ep. 187

In this episode, independent economist, Tony Alexander joins the podcast. Tony was the Chief Economist at BNZ for almost 25 years before striking out on his own.

Here, Tony looks at the primary factors that lead to increases in house prices. The primary factors include:

• decreases in interest rates. As interest rates decrease, taking on more bank lending becomes cheaper and more affordable. That decrease encourages more prospective home buyers to take on more debt and bid up house prices. Tony takes care to stress that this effect will come 'eventually' as opposed to right away.
• Increases in net migration (total number of people migrating to the country as opposed to moving away) will increase the population and increase demand for housing. If this flow outnumbers the number of new buildings completed (and available on the market) this will will eventually increase house prices.
• Changes in financing. As credit becomes more available, more people will take on borrowing, bidding up prices.

Make sure to tune in for tomorrow's episode where Tony will join the show again. And don't forget to test out the Property Investor Quiz. This 7-question quiz will give you a 'yes', 'no', or 'maybe' answer as to whether you are in the position to invest in the housing market or not.