ANZ's economists expect house prices to rise slightly in the second half of this year.
"We are forecasting house prices to lift just over 3% across the second half of the year," their latest Property Focus report says.
"While there are still plenty of headwinds facing the housing market, we expect the tailwinds will blow a little more strongly across the second half of the year."
The tailwinds adding momentum to the market include:
- The rapid surge in net migration
- An easing in new housing supply contributing to a widening housing deficit
- The resilient labour market
Conversely, the report lists the following factors still dragging on the market:
- Relatively high mortgage rates hampering borrowing capacity
- Still stretched affordability levels
- The outlook for a weakening labour market, although this may not yet be obvious to many people
The report says ANZ's economists are still expecting the Reserve Bank to hike interest rates again in November, but also acknowledges the possibility of an interest rate cut depending on how the economy performs.
"While high mortgage rates are certainly suppressing demand by sucking money out of debtors' pockets, household incomes have also grown strongly because of the tight labour market," the report says.
"While we do expect to see the labour market loosen over the second half of the year and lower wage growth as a result, we recently revised our forecasts to incorporate a slower rise in the unemployment rate than previously.
"We now see the unemployment rate rising to 4.2% by the end of the year, rather than 4.4%," the report said.
ANZ is New Zealand's biggest housing lender.
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18 Comments
"ANZ's economists are still expecting the Reserve Bank to hike interest rates again in November, but also acknowledges the possibility of an interest rate cut depending on how the economy performs."
So the property market will go up, unless it goes down? I guess this is the sort of analysis that is produced by 'experts' who've been wrong time after time, and so recently.
It's the future bw, only commenters on housing issues on Interest, know the future with certainty! (see comments section below)
https://www.interest.co.nz/property/122714/volume-homes-sale-weighing-h…
For there to be a 3% 'recovery' by the end of this year, it has to go a lot further down first. The reason is obvious - because the second there is a hint of a 'revival' vendors will retreat and asking prices reset. That can't happen here to get just 3%. It can happen from another 10% down to get +13%, but, again, not from here. (NB: That applies to wherever the terminal 'turnaround' is as well. If we need to shake 40% out of the highs we saw, we need to drop 60% and then 'bounce' to 40% and stabilise. In other words, we are not even half way through yet.)
They are like weather forecasters. It will rain, unless it doesn't. Or it might snow, but it probably will be fine.
My source for that? Trust me.
FTFY:
ANZ is New Zealand's biggest housing lender.
[the rest of the article]
ANZ's economists hope house prices to rise slightly in the second half of this year.
The following headline doesn't seem to agree with 3% rise - NZ Post announces mass staff lay-offs | Stuff.co.nz as this could be the beginning.
With high immigration who do you think is going to be the first preference for competing jobs applications? Newly arrived immigrant desperate to take any/low offer or someone recently laid off with high debt/mortgage payment or high lifestyle needing higher salary?
There would be many regular business leaders or SME entrepreneurs here visiting interest.co.nz daily. Please let us know who would you select first if the skills are identical?
My stance is not pro or anti immigration. What I want to highlight is that there many variables to be considered before trying to place floor under the housing market.
I have hired dozens of people, and somebody with a mortgage is more likely to be a good employee. A recent immigrant lacks a reliable reference among other factors.
You ask people if they have a mortgage at interview?
.. if I say it enough times it will come true .. lol .. what transparent tripe
ANZ says:
- An easing in new housing supply contributing to a widening housing deficit
So - once again - we see the problem. Banks lending to buy existing houses rather than lending to build new ones.
Does anyone else see a problem with their behaviour?
Existing houses can be productive too when they're turned into rental properties, because as soon as that ownership status changes they become money pits.
Just ask any Landlord, they're constantly spending money repairing them which apparently employs builders, plumbers/drainlayers, roofers, electricians so they're "contributing" to the economy and employing people.
You are being naughty. Banks do lend to new build, in fact it lends to new build on lower rates.
I wouldn’t pin too much hope on the resilient labour markets. I am in agricultural supply and hearing of redundancies every week at the moment. Teachers might start to appreciate being in a secure profession in the coming months as many in the private sector wonder how to pay their mortgages.
A bank forecasting house price rises is like skifield operators forecasting a snow storm.
The last line in the article says it all.
ANZ is the New Zealand's biggest housing lender. It's in their interest that prices increase.
But is it good for society or the country?
It would be good if ANZ would remind everyone of the results from previous forecasts on housing, from what I can tell house prices are still falling at a accelerating pace and chances of 3% rise by end of the year is very unlikely. I am wondering why expert’s are pushing this narrative and not giving people the true picture which is their job.
I love the last line of this article
Dreaming ANZ - there is absolutely no way that house prices will recover - more likely to drop another 5%
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