In their previous report, in October, they’d forecast 5-6% inflation nationally by mid-2020. In yesterday’s report, they lifted the forecast increase to 6.5% nationally by mid-2020, based largely on continuing strong activity outside Auckland & Christchurch.
However, they forecast a turnaround in Auckland from a 2.7% decline in the year to June 2019 to 5.5% growth through to June 2020.
Except for Canterbury, where growth would continue to pick up next year from a standstill in 2018, the economists have forecast growth to slow in 2021.
Senior economist Mike Jones wrote in the report: “The key tenets of our broader housing view remain unchanged. We still don’t think we’re headed into ‘boom’ territory, thanks to the restraining effects of various housing policies & the supply response underway.
“We also still think Auckland will underperform the national average, with Wellington & the regions to remain as outperformers. The house price inflation cycle is expected to top out in the high single digits late next year on the back of rising supply & a slow grind higher in mortgage rates.”
The inventory chart, while headlined “hitting fresh lows”, shows Canterbury bobbling about on a roughly straight line since late 2013, and Wellington doing the same since early 2016. Auckland’s inventory rose from early 2016 until this year, when it’s dived sharply. The national curve has been gently downward since 2016.
Attribution: ASB Home Economics.