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Nonetheless, the economy remains in decent shape with growth of 3% likely this year while macroprudential tools are being used to try and cool the housing market. In fact these have been intensified in hot spots such as Auckland – the use of restrictions on mortgages over certain loan to values and income multiples. Moreover, looser monetary policy, high net immigration and ongoing strength in construction should support activity.
Consequently, while the RBNZ suggested that “further easing may be appropriate”, we don’t expect it in this cycle.