Surprise as house prices hit record
A fresh surge in house prices took economists by surprise yesterday and raised fears of another round of mortgage interest rate rises.
Wednesday, April 20th 2005, 9:02AM
by The Landlord
Westpac chief economist Brendan O'Donovan said the housing market was giving mixed signals but appeared to have rebounded strongly."The question is, how long will this last," he said of the $280,000 record-breaking national house price median for March released by the Real Estate Institute.
"The jury is out on whether this rebound is just temporary or a real second wind, because if price rises continue, it puts more pressure on the Reserve Bank to push up interest rates."
He picked a revision of economic forecasts and a rethink on interest rates, which are expected to stabilise.
Economists expect the Reserve Bank to leave interest rates on hold when it next reviews them on April 28.
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