PHOTO: Reserve Bank
ANZ economists believe that the Reserve Bank of New Zealand (RBNZ) could tighten its loan-to-value ratio (LVR) restrictions “if things really start to get silly” in the housing market.
They said in ANZ’s Weekly Focus publication that the housing market is “always worth watching” – emphasising that it could show real signs of taking off soon.
“It’s got the bit between its teeth again. Around the nation, towns and cities are racing to set new records for the unaffordability of housing. Auckland annual house price inflation is back in the black (just), with very limited listings providing the price impetus,” the economists said, as reported by Interest.co.nz.
They predicted a 5% to 6% annual growth in house prices as record-low mortgage rates “are clearly working their magic” and banks have an incentive to try to grab market share in this sector.
Read more: Economists see less need for OCR cuts
The economists noted that a strong housing market supports sentiment and GDP growth.
READ MORE VIA NZ ADVISOR ONLINE