The outlook for 2019

Westpac chief economist Dominick Stephens expected the housing market to experience a temporary and modest pickup in late 2018, due to a sudden drop in fixed mortgage rates and the RBNZ loosening its LVR mortgage lending restrictions.

He says that, overall, the latest data (October/November) has been too volatile to draw any definitive conclusion about whether the market has indeed picked up. More data will be required to confirm whether or not the anticipated modest housing market upturn has come to pass.

“In the meantime, it is worth remembering that we unambiguously anticipate that this will be a temporary housing market upturn. Later in 2019 changing tax policies will impact the market, and we firmly anticipate that house prices will fall when mortgage rates (eventually) rise.”

CoreLogic head of research Nick Goodall says there’s LOTS going on in the coming year. That includes the recent LVR changes, which he doesn’t think will have a big impact on activity, and the likelihood of interest rates rises, which he thinks will be small when they happen.