From Westpac, via Interest.co.nz, comes new research tipping pain ahead for New Zealand’s housing market:
For some time the Westpac Economics Team has been forecasting a modest resurgence of house price inflation this year, before the market turns more decisively negative later next year. Despite our near-term bullishness, we anticipate a period of falling house prices later in the decade.
One rationale for such a multifaceted forecast is net migration. In the short run, net migration is set to hit an all- time high of 50,000 people per annum. Our research indicates that net migration usually plays only a relatively small role in determining house prices. But sheer weight of numbers means that even that small role will translate into a reasonable boost to house prices over the year ahead.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.