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Analysts at ANZ note that New Zealand’s housing market has slowed at the same time as a number of other markets, particularly Australia.

Key Quotes

“The recent slowing in the local market appears to reflect primarily domestic factors, including investor wariness and policy changes. Affordability constraints also appear to be weighing in Auckland – and some international markets like Sydney. But other domestic factors are offsetting; credit is generally available, population growth continues and interest rates remain low.”

“Moreover, the RBNZ has monetary and macro-prudential policy ammo if required. Nonetheless, in the event of a global shock, there is a risk that the New Zealand housing market could be significantly affected.”

“Global housing markets have become increasingly synchronised over time, particularly in downturns. This ups the stakes, particularly given that household debt is close to record highs.”

Sales have taken a step down in recent months, with affordability constraints, policy uncertainty, and a softer pulse in the economy dampening the market – and there is a risk that this recent softening could persist. But offsetting these headwinds, the market is being supported by population growth and pent-up demand.”

“We expect to continue to see further modest price increases nationwide. But there could be some volatility in the housing market data ahead, especially with the foreign buyer ban coming into effect.”