New Zealand has long struggled with housing affordability. Since 2000, real house prices nearly trebled. House price growth in New Zealand over the last two decades has in fact been amongst the highest in the OECD.

The issue is complex, but a lot is known about how the housing market works. For instance, supply constraints are particularly important in New Zealand. Housing demand is also likely to be strong at the moment for various reasons.

Prime minister Jacinda Ardern joined this debate in a recent interview with radio presenter Mike Hosking. Asked if she was worried about housing, Ardern pointed to the current record levels of home lending and suggested that “a lot of that will be, probably, New Zealanders coming home.”

Ardern is correct that net migration can stimulate housing demand and increase house prices under certain circumstances. All else being equal, a growing population needs more homes. But new data released by Statistics New Zealand suggests the role of net migration in house pricing at present is overstated. More significant factors are pushing up demand. On top of this, Covid-19 restrictions have reduced the flow of new housing