Westpac's chief economist says recent falls in mortgage rates will boost house prices but warns of rising rates and falling prices from 2020.
In Westpac's latest Home Truths newsletter Stephens wrote that there were clear signs that recent falls in mortgage interest rates had boosted the market.
"It is clear that the rate of house price inflation has lifted recently," he said.
"This acceleration is coming from Auckland and Canterbury, which have shifted from slightly falling to slightly rising house prices, and from Otago and Southland, where house prices are rising fast.
"Meanwhile, the rate of inflation in Wellington and few nearby regions has eased a little."
Stephens said rising sales volumes were a good pointer to the short term outlook for prices and the lift in sales reported by the REINZ in October was a good indicator that house price inflation was set to accelerate.
He picked that house prices could rise 1.5% in the March quarter, mainly driven by lower interest rates.
But he also warned that the lift in the market could be short lived.
"Mortgage interest rates will not keep falling forever," he said.
"Actually, wholesale fixed interest rates have risen quite sharply over the past week or two.
"That should at least arrest the decline in fixed mortgage rates, if not reverse it.
"This is why we think the current housing market upturn will be short-lived.
"We remain convinced that mortgage interest rates will eventually rise significantly.
"At that point, we expect the housing market to be severely impacted.
"But with the Reserve Bank looking to keep the OCR low for some time, this is more a story for the 2020s than the current decade.
"We are forecasting falling house prices in the early 2020s."
Latest scams to look out for 👀
Neighbourly hopes to keep you safe by keeping you informed of the latest scams circulating. This week, we are sharing two common text message scams:
NZTA / Waka Kotahi scam:
- The scam is a text message saying it's from New Zealand Transport Agency Waka Kotahi, and it encourages the recipient to pay an overdue road toll by visiting a fake website, threatening to take the matter to court within 15 days if they don’t pay up.
- The aim is to trick people into giving away their personal details or pay them money.
- While it is not the first time toll payments have been utilised by scammers, the threat of court action could see more people fall victim.
- The sender will either be a unknown phone number or unknown email address.
Want to report one of these scams? Do so, on Netsafe
NZ Post scam:
- This scam arrives by test message and says it's from NZ Post.
- The premise is that delivery of your parcel was unsuccessful so in order to rearrange delivery. you must click on a link to give your correct address.
- The aim is to trick people into giving away their personal details or pay them money.
- NZ Post advises people not to click the link, but to report the message to the Department of Internal Affairs by forwarding it to 7726.
Think you may have fallen prey to a scam? Get in touch with Netsafe or contact your bank if it involved your bank details.
Remember, if you didn't expect the message and you are now asked to share personal details or money, then stop contact and seek advice elsewhere.
Feel free to share any below that you've encountered recently. This may help others across the country be aware.
This one is a real head-scratcher!
I am a five-letter word and people eat me.
If you remove the first letter I become an energy form.
If you remove the first two letters, I am needed to live.
Scramble the last three letters and I am a drink.
What am I?
Do you think you know the answer to our daily riddle? Don't spoil it for your neighbours! Simply 'Like' this post and we'll post the answer in the comments below at 2pm.
Want to stop seeing riddles in your newsfeed?
Head here and hover on the Following button on the top right of the page (and it will show Unfollow) and then click it. If it is giving you the option to Follow, then you've successfully unfollowed the Riddles page.
Best medical alarms
Do you feel less steady on your feet than you used to be, or perhaps have already experienced a fall or seizure? If so, a medical alarm can help you regain your independence and confidence.
If you have a medical emergency or fall, just press the button on your personal medical alarm and speak to an operator through the built-in speaker. If you can’t speak, an ambulance will be dispatched immediately.
There are a number of different medical alarm options available in New Zealand, so you will be able to find one that suits your needs.
Click read more for the full article.
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