One of the major banks has upgraded its forecast for house prices next year.
Westpac’s economic overview is forecasting house prices will rise 8% next year, up from its previous forecast of 3% growth.
The bank expects a 6.5% increase in house prices this year.
Westpac chief economist Dominick Stephens says the New Zealand economy has accelerated as expected but the surprise recently has been very low inflation.
He says it means the Reserve Bank can keep interest rates low for longer and the Official Cash Rate is not expected to be moved until July 2013.
“But of course the longer that interest rates stay low, the hotter the housing market will get and it is certainly warming up right across New Zealand now”.
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