The market and in particular the Auckland market seems to be back in full swing. After a few months with lower overall sales numbers and
auction clearance rates falling the last couple of months the last month or so has seen a complete reversal with Auckland hitting the highest
ever median sale price according
to REINZ in March and strong
sales numbers appearing across the board.
With the hit to the Agri market the Reserve Bank can’t increase rates to slow down the market and Governor Graeme Wheeler has already shown that he is not slow to use other tools to try and control the market.
There is starting to be an increasing amount of commentary suggesting that further tools may be introduced such as THIS from Westpac and HERE on Interest.co.nz
What is interesting is that both the Westpac economists in this piece and Tony Alexander in his weekly commentary from a few weeks ago suggest that the prices are going to keep rising for the moment.
I expect that the Reserve Bank is likely to have a similar view and so keep an eye out for a news release around the 11th of May for their next Financial Stability report which is where we will likely find out what their intentions are.
If you would like to discuss this further feel free to email me at email@example.com.