NZ Housing Market Under Pressure from Inflation and Interest Rate Hikes
The New Zealand housing market is showing few signs of recovery, with house prices continuing to slip and sales lagging behind new listings. The situation is exacerbated by rising inflationary pressures both domestically and globally.
Recent economic data has been encouraging, with manufacturing and services PMI indices holding in expansionary territory for the third consecutive month. Tourism arrivals are also on an upward trajectory, but spending metrics depict a dispirited consumer.
The Reserve Bank is expected to raise the Official Cash Rate by 25 basis points at both October and December meetings, following global interest rate hikes and a falling NZ dollar. This will put extra pressure on retail interest rates, potentially adding further drag onto the housing market.