Home prices and the summer heat, constantly rising

For a couple of months, just before spring, I thought the impossible had occurred. Despite, all of my predications of continued property price rises, I was starting to feel that we had hit a plateau. Clearly, I was not properly reading the tea leaves.

Property prices are still rising. According to The Ministry of Housing and Construction figures recently released, new home prices rose by at least 6% in real terms in the first quarter of 2013, compared to the same period in 2012. In addition, second-hand homes prices rose by 5% in real terms in the first quarter of 2013 compared to the same period in 2012.

As I have often stated, it is interference in the property market, though well meaning, that is causing an already skewed supply and demand dynamic, to become even more severe. Property experts believe that the cancellation of the betterment tax exemption, and a new purchase tax on luxury purchases, will freeze numerous transactions in the near term. With less stock on the market, rental and sales prices naturally and necessarily climb.

The Ministry of Housing and Construction is aware of this recent pricing surge and is studying the new data. Apparently, they are proposing extraordinary measures to stabilize prices. I love these guys, they are from my party. We see eye to eye ideologically. However, may the powers that be, protect us from any extraordinary measures.