New Zealand’s house prices will keep rising strongly

The RBNZ is responding to the recent surge in house prices by reimposing and later tightening LVR restrictions on mortgage borrowers. The impact of LVR restrictions on the housing market has been mixed in the past. And we estimate that the restrictions will reduce the volume of sales by no more than 10%, which would still be consistent with strong price growth. As such, we doubt the restrictions will be enough to cool the red hot housing market.

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