We are hearing positive growth forecast in the first BNZ – REINZ Residential Market Survey for 2012: which has found a reasonably sharp turn for the better in New Zealand housing market activity. Each of our eight major measures of housing market strength has risen over the past month to show a residential real estate market attracting more interest from investors, even more first home buyers appearing, buyers becoming more motivated than sellers, and prices more strongly perceived to be rising. The results gel with media commentary last week regarding accommodation seekers having greater and greater difficulty finding what they want.
Also the ASB Economic Weekly Global : states that growth forecasts are no longer being revised lower, as growth in Asia has held up and growth in the US has been better than expected. It is now possible the next revisions to global growth could be upwards, which would support the NZD.
Westpac Weekly Comment: A slightly rosier hue has also appeared in New Zealand interest rate markets over the past few weeks. The Reserve Bank of Australia’s surprise decision to leave interest rates on hold in February has played an important role, and with the perceived risk of a catastrophic event in Europe receding and some positive signs in the New Zealand domestic economy (in particular retail trade and gathering momentum in the housing market) markets are now pricing a bit less than a 50% chance of a rate hike by the RBNZ by December. It will be interesting to see if the more positive tone also permeates New Zealand business confidence this week.