N.Z. Home-Sales Plunge May Cap RBNZ Rate Moves: Chart of the Day
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Slumping New Zealand home sales pose a “significant risk” to the economic outlook and may prompt the central bank to slow the pace of interest-rate increases even as house prices soar, the New Zealand Institute of Economic Research has warned.
The CHART OF THE DAY illustrates how changes in home-sales trends typically presage shifts in New Zealand’s economic growth by about six months. Sales plunged 20.2 percent in April from a year earlier, according to data published by the Real Estate Institute of New Zealand on May 12. The lower panel shows the nation’s house prices are above the peak reached before the global financial crisis, unlike those in the U.S, based upon the S&P/Case-Shiller 20 City Home Price Index.