Today the Reserve Bank has again left the Official Cash Rate (OCR) unchanged at 1.75 percent, but suggests that the slowdown in house price inflation could be temporary.
Reserve Bank Governor Graeme Wheeler says that global economic growth has increased and become more broad-based. However, major challenges remain with ongoing surplus capacity and extensive political uncertainty.
House price inflation has moderated further, especially in Auckland. The slowdown in house price inflation partly reflects loan-to-value ratio restrictions, and tighter lending conditions. This moderation is projected to continue, although there is a risk of resurgence given the on-going imbalance between supply and demand.
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