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As predicted the housing Markets in Auckland and Christchurch have resulted in an intervention by the Reserve Bank, this has not been seen since 2007. First National Real Estate raised these concerns last month within the media across the country in their Press Release.

Median prices only show where the market is performing- First National Press Release
‘Reported record median price rises do not always indicate what is happening in the market. Median prices only show where the market is performing. If the median price is high, then this shows activity at the upper level, if the median is lower it shows activity in the lower range of the market. Some people are influenced by the hype of the Auckland and Christchurch market and the median price can also put people off purchasing, whereas this not always a realistic indicator. In summary, the regulatory decisions relating to property increase as well as a potential early increase in the OCR means a cautious approach should be taken, if using either median house prices or Auckland and Christchurch as the indicators’.

Reserve Bank Intervene- First time since 2007 (National Business Review) “The Reserve Bank have intervened in the financial markets in an attempt to stabilise the currency which was “significantly overvalued, while warning the strength in the property market was threatening the country’s financial system,” were the comments made after Mr Wheelers briefing. “The housing market has become a growing headache for the central bank, as Auckland sale prices hit new record highs in a rapidly heating market, while at the same time a strong currency has limited the bank’s ability to stoke lending growth with lower rates.”

Filed under: REAL ESTATE | Tagged: Real Estate