The state-backed bank's team of forecasters, including chief economist Jarrod Kerr, believe there's plenty of room left to run in this unprecedented market surge.
In their latest report, the bank's team "dramatically revised" their outlook for the market. They had previously tipped a rise of 12%-15%.
The revised forecasts were made off the back of the recent REINZ data, which showed once again a significant level of activity in the market.
According to the REINZ data, house price growth reached 20% in February.
"You have to go back to the apex of the last nationwide property boom in 2004 for a similar rate," the Kiwibank team said.
The bank added the jump in sales could be explained by a rush to beat LVR restrictions.
The restrictions "should take some heat out of the market", however the rules may not quash investor activity as much as planned.
Rising equity levels in investor portfolios would give landlords enough room to leverage from existing properties and continue to buy, the bank said.
Kiwibank's team added: "The recent sharp surge in house prices has helped to push up investors’ equity on existing portfolios. Equity that can be used as a deposit for additional borrowing.
"Other measures are needed to tame the housing market, and we await to see if the Government gives the RBNZ go-ahead to use debt-to-income restrictions on investor related mortgage lending."
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