According to ANZ’s latest Property Focus, New Zealand’s house price crash is around two-thirds of the way through ANZ’s forecast 22% peak-to-trough decline. Ongoing falls in house prices are expected as “supply and demand dynamics continue to swing in favour of buyers”. House sales, which tend to lead prices by a few months, fell 6.2% m/m, with the trend still clearly southbound. All in all, the December housing data was practically a straight flush when it comes to the housing market pulse: momentum is still softening. On our outlook, house prices relative to household incomes are expected to improve (fall) beyond the levels that prevailed just before the pandemic, but not meaningfully (figure 3).
