ANZ: No OCR increase until 2014

It says house prices are still high relative to incomes and ongoing deleveraging, or paying down debt, will limit the extent of the upturn.

A shortage of listings and low interest rates continue to provide support for house prices, with prices up 6.1% on the year before.

Of the report’s 10 gauges, which predict the movement of house prices, two point to prices falling, two to prices increasing, two to prices increasing or remaining steady, two to prices dropping or remaining steady and two to prices stabilising.

On the negative side, housing affordability has been dented, households are trying to eliminate debt, the global economy is weak and migration is still negative although that may be turning. On the positive side, interest rates are low, housing construction is down, the number of months to sell is at a four-year low although in terms of housing stock supply is increasing faster than demand.