Housing market tipped to flatten before Christmas

ANZ economists are expecting the housing market to flatten as Christmas approaches, rather than go higher, as credit growth remains weak.

Part of the reason for house price rises had been a lack of listings, with support from low interest rates and net migration inflows. It was also clear cashed-up buyers were still in the market, ANZ's weekly Market Focus said yesterday.

"But we also suspect the altered credit backdrop and weak labour market led to hesitancy to list and the lack of supply was consistent with an economy that was deleveraging [decreasing debt]." A reported large rise in listings in September suggested the supply side was now responding.

"It would be tempting to surmise that rising supply will suppress prices, but it may also be a sign of confidence in the market, ie recent housing market trends are leading to increased confidence from homeowners to test the waters," Market Focus said.

To read the full NZ Herald article, click here

Posted: 6 Oct 2009

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