There are no rate changes to report before tomorrow's OCR and Monetary Policy Statement. However yesterday we had the latest REINZ house price numbers which show Auckland and Christchurch house price inflation is now running at double digit numbers in these two areas.
ASB says the Reserve Bank is likely to become concerned by the continued increase in house prices and the subsequent lift in credit demand, particularly given debt-to-income and house price-to-income ratios are already elevated. While the central bank is looking at macro-prudential tools to control the market, the OCR is the most effective tool for dampening housing demand, ASB notes.
