We can see evidence for the bottoming out idea in the 11% seasonally adjusted rise in nationwide dwelling sales in April according to REINZ data. Their data also show that prices, again after adjusting for seasonal factors, were flat in April after falling 0.1% in March.
The discussion about the market potentially being at the moment which we have seen building in recent weeks, is now likely to get stronger for a number of factors. Highly important among these was the decision by the Reserve Bank on May 23 to raise the official cash rate by 0.25% and unexpectedly signal that they don’t feel they will need to raise it again.
This came as a surprise in light of the extra stimulus contained in the Budget and uncertainty surrounding the net impact on inflation of shifting migration flows. The fact that people can now see the worst-case scenario for their home loan rate doesn’t mean they will start talking soon about rates falling away.