This paper identifies the expansion and contraction phases of New Zealand's national and regional house prices, by employing techniques typically used to study cycles in real activity, the so-called Classical cycle dating method.
We then enquire into the nature of the cycles, addressing five questions:
- What are the New Zealand and regional house price cycles, and do the regional cycles differ from the national cycle?;
- What are the typical durations, magnitudes and shapes of these house price cycles?;
- Do cycles in house prices match cycles in economic activity, at either national or regional levels?;
- Does it matter which of the two main sets of house price series are used? i.e. Quotable Value New Zealand (QVNZ) or Real Estate Institute of New Zealand (REINZ)?; and
- Does the sample period matter?
Findings are evaluated in the context of work by Grimes, Aitken and Kerr (2004), and Hall and McDermott (2005). Avenues for further research are suggested.