Can the NZ economy grow while house prices stagnate?

The latest data from the Real Estate Institute showed its house price index in May was down 16.2% from the peak in late 2021 and that prices have continued to fall in the last six months.

Assistant Reserve Bank governor Karen Silk told the media conference after RBNZ’s latest official cash rate decision, which was to raise the OCR from 2.25% to 2.5%, that it’s not just demand that is impacting the housing market but that supply has also changed.

The latest data from StatsNZ showed that while housing consents fell 4% in May from April, the 39,737 consents in the year ended May were up 19% from the previous year and at their highest annual level since the year ended October 2023.

In the minutes from the monetary policy committee meeting, Silk had said that slower than expected net immigration could weigh on rental inflation and house prices.