New Zealand housing market peaking - AmpGFX

Greg Gibbs, Director at Amplifying Global FX Capital, suggests that the New Zealand’s economy may have more momentum than Australia, but there is evidence that its housing market has also peaked. 

Key Quotes

“This is likely to reflect the tougher macroprudential measures (lower loan-to-ratio thresholds) implemented since 1 October.”

“The RBNZ said in its Financial Stability Review released on Wednesday that, “The Reserve Bank has asked the Minister of Finance to agree to add a Debt to Income (DTI) tool to the Memorandum of Understanding on macro-prudential policy. While the Bank is not proposing use of such a tool at this time, financial stability risks can build up quickly and restrictions on high-DTI lending could be warranted if housing market imbalances were to deteriorate further.”

“As such, the RBNZ is currently tackling its excessive housing market price growth with aggressive tactics and bringing on more tools to be used if required.”

“The QV house price index slowed from 12.7%y/y in the three-months to October to 12.4%%y/y in the three months to November.  The REINZ has reported house sales falling from year-ago levels since July (down 14.2%y/y in October).”