NZ: Nationwide housing market will remain contained - ANZ

According to analysts at ANZ weakness in the Auckland and Canterbury markets have weighed on the New Zealand’s nationwide picture, with these regions comprising 42% of house sales combined, but a number of other regions have experienced strong price gains recently.

Key Quotes

“Conditions can change quickly and the outlook is uncertain, but all else equal, strong demand in these markets appears conducive to further regional price increases. This delayed cycle relative to Auckland is not unusual for the New Zealand housing market.”

“On the whole, we expect that the nationwide market will remain contained. But regional divergence is expected, with hotspots expected to continue to outperform while headwinds blow strongest in Auckland and Canterbury.”

“The housing market is navigating a period of volatility. The foreign-buyer ban came into effect in mid-October, stymying demand, even if only a small portion of buyers are affected. And a number of offsetting forces are at play.”

“But a number of headwinds are acting on the market, including bank prudence, investor wariness and affordability constraints – and these are expected to see the market remain contained. Given this outlook, we expect that the RBNZ will ease loan-to-value ratio restrictions at the November FSR, but continued caution should see settings remain “tight” for some time.”