August 17 edition of the BNZ Weekly Overview
Data releases this week show that retail spending growth has slowed, business input costs are rising strongly, the
housing market is only slowly easing and by one measure at least is actually improving, while consumer confidence has
eased marginally. We step back from the fray and take a fresh look at the housing market. What we see is a growing list
of reasons why one might as well keep on buying residential investment properties. These reasons include the Reserve
Bank's struggle to maintain low inflation, below average long-term fixed interest rates, the very tight labour market,
and the numerous methods being suggested to get extra buyers into the housing market including the expansion of the
government's own zero deposit scheme.
- Tony Alexander
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