Don’t count on a market upturn

First, the Government nixed the introduction of a capital gains tax and then the Reserve Bank cut the OCR to a record low, which serves to further consolidate the era of sub-4% mortgage rates.

At the same time, migration flows remain strong and house building has cranked up to the high levels last seen back in the 1970s.

Some commentators believe this combination will lead to an upturn in housing market growth – but BNZ chief economist Tony Alexander is not among them.

In his latest weekly overview, Alexander says that while migration flows are supportive of house prices, neither they nor the level of interest rates lead him to feel that a fresh upturn in the housing market is approaching.