NZ: Recent firming in house prices to be short-lived - ANZ

ANZ analysts explain that the New Zealand’s house prices have firmed over the past six months, particularly in the regions, with falls in mortgage rates providing a boost.

Key Quotes

“We expect the recent firming to be short-lived. House sales fell in February, after the easing in loan-to-value ratio restrictions provided a temporary boost in January.”

“Looking thorough volatility, the trend has been fairly flat since mid-2017. From here, housing market activity and price pressures are expected to be limited. Demand pressures are not building as strongly as before, with a lower (but uncertain) impulse from migration. And headwinds are also evident; bank prudence, investor wariness, and affordability constraints.”

“Tighter credit conditions may emerge if proposed increases in bank capital requirements are implemented. Proposed Government policy changes, and the uncertainty associated with these, are also expected to see the market remain contained.”