2. Movers aren\u2019t moving <\/p>\n
Underpinning the slowdown in sales has been caution from relocating owner-occupiers, or movers, who are currently choosing to stay put more often than usual. Sometimes, movers may be stuck where they are due to a lack of suitable choice. But this is not the case right now, given that available listings are abundant. Instead, their relative lack of activity is likely related to the sluggish economic backdrop and reduced job security, as well as perhaps less confidence they\u2019ll get a price they want (even if the next house they buy may also come cheaper, too). <\/p>\n
Looking ahead, a more pronounced comeback by movers may not be on the cards for a while yet either, with economic growth not really anticipated to strengthen on a sustained basis until perhaps the middle or second half of next year. <\/p>\n
3. Q2 GDP data was good, but caution remains <\/p>\n
On that note, we got the Q2 GDP data last week from Stats NZ and, at face value, a 0.2% rise in economic output was respectable for the April-June period, given the uncertainty in the global economy. Construction was decent, as was manufacturing and wholesaling. On the other hand, transport and hospitality were softer, which is not surprising given higher fuel costs. <\/p>\n
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Cotality chief economist Kelvin Davidson: “Sometimes, movers may be stuck where they are due to a lack of suitable choice. But this is not the case right now, given that available listings are abundant.” Photo \/ Peter Meecham<\/p>\n
But the 0.2% lift still suggests a relatively subdued economy, with spare capacity lingering, which would tend to bring down inflation over the medium term. In that context, the GDP data on its own may not necessarily raise the chances of an OCR rise on October 28. However, other economic indicators have looked better, and fuel prices have risen sharply again. Perhaps the best we can say right now is that an OCR rise next month shouldn\u2019t be ruled out altogether (having previously looked less likely). <\/p>\n
4. Net migration is still rising but from a low base <\/p>\n
Meanwhile, last week\u2019s Stats NZ figures showed a net migration inflow to NZ of 20,351 people in the year to July (albeit subject to later revisions), up from the trough of 9230 in August last year and the highest figure since December 2024\u2019s 23,747. Of course, the net migration tally remains relatively low by past standards, and there is no evidence it is putting pressure on property values or rents. <\/p>\n
5. A further slowdown for mortgage lending? <\/p>\n
After a flurry of important data last week, the next few days are quieter again, but my focus will be the RBNZ\u2019s mortgage lending stats for August on Thursday. A slowdown in overall lending volumes showed up fairly clearly in July\u2019s figures and another soft figure for August would not be a surprise. The breakdowns are always intriguing too, with bank switching\/refi recently showing lingering resilience (although not as strong as before), and the loan-to-value and debt-to-income ratio rules not really binding at present. <\/p>\n