Westpac issues warnings
In its Economic Overview for August, bank chief economist Dominick Stephens said the Reserve Bank was allowing interest rates to remain low because inflation was unthreatening and the dollar still uncomfortably high.
But the flow-on effect had been that the housing market had had a resurgence this year, Stephens said. “The housing market has been the standout performer of the last year. Auckland and Canterbury continue to lead the way in terms of price growth, reflecting their respective supply constraints but prices are now turning higher nationwide.”
He said there was no question that mortgage rates were a factor.
“This situation could persist for a while, so we now expect no change in the Official Cash Rate until July 2013.”
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