ANZ's economists cut their house price forecast but admit no one can forecast the housing market with a high degree of precision

By Greg Ninness

ANZ is the latest bank to slash its house price forecast for this year.

In its latest Property Focus report, ANZ, which is this country's biggest residential mortgage lender, cut it's house price growth forecast for this year to 1% from 3%.

ANZ's downgraded price forecast comes just one day after Westpac slashed its 2024 house price growth forecast to 2.1% from 5.8%.

"Following May's weaker than expected Real Estate Institute of New Zealand data and taking signal from the forward indicators, we've downgraded our house price forecast," the ANZ report said.

"It's worth noting that while a downgrade from 3% to 1% could give the impression that we're able to forecast the housing market with a high degree of precision, we can't and nor can anyone else."

"But we've crossed a threshold warranting a forecast update and the upside and downside risks feel more balanced around a 1% year-on-year rise this year than a 3% lift," ANZ's economists say.

"In the big picture, this is only a tweak to our forecast, and it is probably best thought of as a delay to what we were previously expecting: modest growth, with gradually falling mortgage rates offset by softening household income prospects (including job security fears), as the labour market cools."

ANZ's economists are now expecting house prices to go broadly sideways over the next few months, before rising very gradually towards the end of the year.

This story was originally published on Interest.co.nz and has been republished here with permission.