House bubble not big enough to burst - yet
Wednesday 4 February 2004
Reserve Bank governor Alan Bollard says that he would be prepared to raise interest rates to prevent a housing price bubble but says that would only happen in rare circumstances.
By The LandlordSpeaking to the Canterbury Employers’ Chamber of Commerce on Friday, Bollard said the recent boom in the housing market isn’t sufficiently overheated to warrant "such a severe intervention".
Thursday’s interest rate hike "was just part of the normal operation of monetary policy to ensure continuing consumer price stability," Bollard said. But housing is currently still the biggest element in the day-to-day controlling of consumer price inflation.
Housing demand can shift dramatically in a short space of time and it takes time to build new houses so house prices are prone to significant short term movements, Bollard says, noting the close correlation between net migration inflows and house prices.
Read More - Opens in a new window
Commenting is closed
There’s been a rallying of the market with the latest REINZ data showing both sales volumes and median house prices noticeably up with the onset of Spring.
There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Auckland-based commercial property disrupter, Jasper, has raised $2.3 million in seed funding following investment from European asset manager M7 Real Estate.
LVR speed limits continue to have a "strong effect" on investors, according to CoreLogic, after the latest Reserve Bank data showed a drop in investor borrowing.