Prices acquire extra importance
Monday 24 September 2012
Economists are watching house prices with extra interest since it was announced that the Reserve Bank will now have to take asset prices into account in setting the Official Cash Rate.
By The Landlord
It was announced last week that new Reserve Bank Governor Graeme Wheeler would be expected to adjust the OCR in response to over-heated or falling asset prices.
BNZ said this was an interesting development, given that there are imbalances with the housing market at the moment, including double-digit annual price inflation in Auckland.
Westpac said its view that house prices will increase 6.5% this year and 8% in 2013 would become particularly important.
“On our forecasts, by July next year accelerating house price inflation should be apparent to all in sundry. And, against a backdrop of inflation rising toward the top of the target band (we expect inflation to be 2.7% by mid-2013), and a Canterbury rebuild starting to hit its straps, we expect that the conditions required for the OCR hiking cycle to be kicked off will be met.”
Westpac said it was sticking to its forecast of July 13 for the first OCR hikes.
Comments from our readers
No comments yet
Sign In / Register to add your comment
House Prices
What lies ahead for the housing market
As New Zealand begins to settle into the “new normal” of the Covid-19 lockdown, commentators have started releasing their (tentative) outlooks for the housing market. Here’s a summary of some of them...
Commercial
Commercial sector facing hundreds of millions in lost revenue
Some large commercial tenants are refusing to pay rent and this could devastate the commercial property sector, the Property Council New Zealand is warning.
Mortgages
Banks roll out mortgage holiday
Major lenders have launched mortgage holidays for borrowers affected by the Covid-19 outbreak, using online application forms to process customer requests.
