Low rates driving prices: ANZ

Borrowers with more than 20% equity can get a carded six-month or one-year fixed rate of less than 5%.

Of the report’s ten gauges that it uses to indicate which direction house prices may go, two point down, one points up, two are keeping prices steady, four are keeping prices steady but starting to push them  up and one is steady but tending towards pushing prices down.

On the negative side for house prices is affordability.

The bank notes that low mortgage rates are the one factor helping make houses more affordable.

A lack of housing supply is also keeping prices buoyant.

The time to clear the market in New Zealand is at a five-year low. In Auckland, it’s at a nine-year low.

The report notes that house construction consents are at a 50-month high.

On balance, the report says, momentum is building.

Apart from the lack of affordability in the market, the only factor that is purely pushing prices down is New Zealand’s reducing appetite for debt, the report says.

Household debt claims as a percentage of disposable income are now at a six-and-a-half-year low.

ANZ says despite unemployment trending higher, a strong dollar and low inflation, it is difficult to envisage an OCR cut with such a strong Auckland housing market, and before the Christchurch rebuild begins in earnest.