(Adds comment from finance minister)
WELLINGTON, March 12 (Reuters) - The New Zealand government on Friday reiterated plans to introduce property cooling measures after the IMF warned that “unsustainable” house price rises could trigger a pronounced correction.
Finance Minster Grant Robertson said the government will address the issue of the elevated house prices in the coming weeks and in the 2021 budget later this year.
The country’s success in managing COVID-19 has enabled a faster economic recovery than other countries, but a slew of monetary and fiscal stimulus measures has super-charged property market values.
The International Monetary Fund’s warning, in a staff report released on Friday, comes as New Zealand’s median prices for residential property rose by a record 22.8% year-on-year in February, according to the latest data from the Real Estate Institute of New Zealand (REINZ).
Kathryn George and Aaron Wood/Stuff
In May, Stuff published an explanatory feature on the historic Covid-19 Budget, announced by Finance Minster Grant Robertson. The feature included this quick guide to a Budget deficit.
New Zealand has relatively soft landing from the pandemic, according to the latest Crown accounts. The accounts, which take in the five months ending on 30 November 2020 still show an OBEGAL deficit of $4.3 billion, but that’s a whole $1.9b better than the deficit forecast in Treasury s most recent set of forecasts, the Half Year Economic and Fiscal Update, or HYEFU. Those forecasts were also finished on November 30, 2020, meaning that by the time they were published in December, they were already billions of dollars off target. However, this could change as the year goes on and expenses ramp up.