Reserve Bank predicts OCR to not change
The inflation of house prices in New Zealand has slowed down, with recent data from QV (Quotable Value), showing, the median price of housing in Auckland has dropped by 0.4% this month, maintaining the uncertainty of the city’s market. But Auckland isn't alone. Hamilton and Christchurch have too, seen the value of property, decline.
QV’s Auckland manager, James Steele has indicated that since the changes to LVR, lower end of the market properties, in investor hotspots are no longer being sold for the same amounts.
“There has also been a surge in listings coming onto the market during February which is giving buyers more choice” said Steele.
The prediction by The Reserve Bank is that the Official Cash Rate will stay unchanged throughout 2017 and 2018, and forecasts there won’t be a spike until the second half of 2019.
Governor Graeme Wheeler from The Reserve Bank has said that chances of the next official rate moving up or down are equally the same, adding that inflation risks appear to be balanced.
While some banks are lifting longer term mortgage rates, others are tightening lending criteria to slow down lending growth, in order to be on par with the growth of term deposits.
A Debt-To-Income limit will most likely not be brought in by The Reserve Bank, this year. Before considering the use of the financial policy tool, a public consultation will need to take place. The consultation is due to start in March and therefore it's unlikely that the tool will be available any time soon.