120% in 10 years is 8.2% and longer term you'd probably see that reduce closer to 7%. Auckland long term sees 1.2% higher growth p.a than rest of NZ, although this includes the recent auck only boom so this extra growth might disappear over next 5 years as rest of NZ grows faster than auck.
If population was static you'd say property should increase at the rate of inflation (1-3% pa) as the service it produces (shelter) remains constant, so only increases in value due to money losing its purchasing power.
Population growth changes things as new land must be opened up and new houses built. The cost of new houses and new land increases far greater than inflation, helped through overly restrictive planning regulations, new building regulations, and large overheads (council fees) for developers which mean building more expensive houses is the only economically viable option.
If population was static you'd say property should increase at the rate of inflation (1-3% pa) as the service it produces (shelter) remains constant, so only increases in value due to money losing its purchasing power.
Population growth changes things as new land must be opened up and new houses built. The cost of new houses and new land increases far greater than inflation, helped through overly restrictive planning regulations, new building regulations, and large overheads (council fees) for developers which mean building more expensive houses is the only economically viable option.
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