Auckland property investors: Deposit rise and limited lending possible

BNZ’s Chief Economist Tony Alexander reflects on Auckland’s housing market since the minimum 40% deposit for property investors was introduced and suggests further changes could be coming.

We are now three months into the period when banks have been implementing the Reserve Bank’s policy of requiring investment property purchasers to have a minimum 40% deposit. The evidence to date from this change is that buyers have backed away from the market, resulting in lower auction clearance rates and properties taking slightly longer to sell. Continue reading…

Today’s inflation forecast: Subdued, with a chance of increased credit control

What are the chances that interest rates will rise sharply, cause big cash flow problems for home owners, and produce a 10% plus decline in Auckland house prices? Very slim. Why? Because the key driver of rising interest rates is rising inflation and central bank efforts to fight it, and all around the world apart from Venezuela inflation is low and showing little sign of rising. Continue reading…

As low as they’ll go: Interest rates and Auckland’s housing market

The Reserve Bank cut its official cash rate by 0.25% on December 10 so it is now back where it was in March last year before 1% worth of increases to fight expected inflation. The inflation never came. In fact rather than reaching a predicted 1.6% inflation fell away to just 0.4% courtesy of a firm NZ dollar, falling fuel prices, and factors unexpected by the Reserve Bank. Continue reading…

3 reasons Auckland’s housing market went into overdrive

Late last year we started to see a spike in activity in the Auckland housing market in terms of both turnover and prices. It looks like a key driving force behind this was a rush of new investors entering the market, probably encouraged by three key things. Continue reading…