RBNZ Hikes OCR: Christchurch housing market prices under check

The last quarter witnessed Christchurch housing market prices soar to their highest in three months. A growth of 8.8% in three months, helped the metro depict the biggest growth of all the seven major housing markets in NZ. While the housing prices in Christchurch are the lowest among these metros. The incumbent hike in the Official Cash Rate (OCR) by the Reserve Bank of New Zealand (RBNZ) is expected to further check the Christchurch housing prices- According to Christchurch housing market predictions from experts.

New demand to combat OCR hikes
The RBNZ introduced a 0.75% hike in the OCR, as of the final policy meeting of the calendar year. Experts inferred an increase in rates by 25 basis points; a survey concluded that investors had, however, expected a hike along the lines of 50 basis points. Press statements from the RBNZ report that this was a highly likely scenario; although, the RBNZ meeting finally signed off on 25 basis points as the best option at hand.

The Government however looked to soften the blow of the OCR hike by reopening its borders in 2023. This spells new consumers and increased housing demand even as NZ looks to recover from a swap rate drop of 20 basis points in two years. Christchurch housing market news indicates strong a demand for quality housing in Christchurch suburbs for buyers with debt or on a budget.

This demand is also expected to help stave off the pressure from domestic and foreign (especially South Korea and Singapore) central banks curbing stimulus options to consumers. All of this spells a positive final quarter of the calendar year for the dark horse of NZ’s major metros.

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Christchurch Housing Market Reports Quarterly Growth in Average Home Prices

What does this spell for the Christchurch housing market?Christchurch housing market updates suggest a hike of up to $58,000 in the last quarter. While the initial stimulus may have flared up the house prices, the present OCR changes can pave the way for housing demand. The resultant property market boom works hand-in-hand with inflation hitting 4.9% and unemployment reaching its lowest (3.4%) in a decade.

By mid-2022, the OCR is expected to reach a 2% hike. Forecasts from the RBNZ itself indicate a rise up to 2.5% in the OCR by 2023, and even higher by December 2024. Even as interest rates are expected to increase, the employment and investment opportunities spell a greener pasture for both sellers and buyers of Christchurch, in the coming days.