The Monetary Policy Statement accompanying today’s official cash rate (OCR) decision by the Reserve Bank of New Zealand (RBNZ), which saw the OCR remain at 1.75%, forecast a heavy slowing of house price growth on the back of recent macro-prudential curbs and forecast slowing population growth:
Despite ongoing strength in the fundamental drivers of housing demand, namely population growth and low mortgage interest rates, housing activity has slowed since mid-2016. This likely reflects a range of factors, including changes to LVR policy, and increases in mortgage rates in 2016, and increasing pressure on affordability.
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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.
