Bubble Risk In House Prices Deflating


The risk of a significant NZ house price correction is slowly moderating, Moody’s says

July 31, 2014
By Gareth Vaughan


Credit rating agency Moody’s says the risk of a significant New Zealand house price correction is slowly moderating thanks to steps taken by the Reserve Bank and efforts to boost housing supply.
In a report on the New Zealand banking system Moody’s Sydney-based analyst Daniel Yu says the housing market “exuberance” of the last year raises some longer-term concerns, but the current house-price appreciation hasn’t been fuelled by excessive credit growth.
“Moreover, the risk of a significant house price correction is slowly moderating, as a result of Reserve Bank to cool down the market, as evidenced by a slowing of house sales and price growth.
“Elevated household debt remains a key sensitivity of the household sector.
But our expectation is for the Reserve Bank to tighten monetary policy gradually.”

Read the full article here:

http://www.interest.co.nz/bonds/71204/risk-significant-nz-house-price-correction-slowly-moderating-moodys-says

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