Home Economics

An in-depth analysis of the New Zealand housing market - currently a hot topic on the economic, social and political fronts.

Home Economics: Bracing for Impact
13 May 2022
- House prices are falling but the bulk of the impact from the mortgage rate surge is yet to come
- Faster and larger lifts in mortgage rates mean we now expect modest house price declines through to mid-2023. All told, we expect around a 12% decline. In real terms though, this would amount to a 20% correction
- We expect a house price inflation recovery to kick in over the second half of 2023, tied to our forecasts for an upturn in net migration and flattening mortgage rates
Housing Insights: House Prices - From hero to zero in 2022
01 Dec 2021
- Supply and demand dynamics in the housing market are finally changing.
- Lofty house prices are at risk from the confluence of three big macro forces next year.
- We’ve updated our forecasts to take account of these risks, and now expect small falls in house prices over the second half of 2022.
Home Economics: Upcycling
25 Aug 2021
- We’ve upped the amount of ‘cycle’ in our house price inflation forecasts: more this year, less next.
- Therecent COVID outbreak means a chunk of activity will get postponed, rather thancancelled. But we don’t think this will have a lasting impact on the houseprice outlook, assuming the lockdown is brief.
- Higher mortgage ratesare a gamechanger. But most of the house price impact will occur next year. Wehaven’t materially changed our mortgage rate forecasts despite the RBNZ’sAugust pause.
Housing Insights: Can we cope with higher mortgage rates?
29 Jun 2021
- We find households in aggregate have plenty of buffer to cope with higher mortgage rates. Household gearing and mortgage serviceability metrics are at low levels.
- But there are some sensitive spots, such as new entrants to the housing market. There’s also a bit of re-set risk out there – 77% of all mortgage debt is on fixed-rate terms of less than a year.
- At a macro level, the RBNZ will get more bang for its buck when interest rates eventually do rise. Higher mortgage rates are also a key factor behind our view house price inflation will slow down from here.

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Home Economics

Home Economics: Bracing for Impact

Housing Insights: House Prices - From hero to zero in 2022

Home Economics: Upcycling

Housing Insights: Can we cope with higher mortgage rates?

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