ANZ Bank has released research tipping that the Reserve Bank of New Zealand (RBNZ) will have to lift the official cash rate (OCR) another 1.5% to a peak of 5%. The prospect of a higher OCR means New Zealand house prices will fall further. ANZ now forecasts “around a 18% peak-to-trough decline in house prices, or 27% when deflated by [Quarterly Employment Survey] wage growth”. ANZ also believes it will be “a line ball call” whether the economy falls into recession. While this may be true for the economy, a recession and house price crash are bad news for the Ardern Government, which will go to an election late next year seeking a third term.

Source: New Zealand Herald November 12, 2022 00:30 UTC