It won’t happen overnight

Westpac Institutional Bank Team Westpac Institutional Bank

The housing market continued to cool in April. However, we expect to see it picking up again through the back half of this year. That's thanks to the very low level of interest rates and the cancellation of the capital gains tax, both of which will boost purchasers' appetites.

April was another very weak month for the housing market. Sales fell another 2.6% over the month, leaving them 11% lower than the same time last year. We also saw annual house price inflation slowing to 1.3%, its slowest pace since 2011.

Looking under the hood, a lot of the weakness in the housing market continues to be centred on Auckland, with prices down 4% over the past year and sales at their lowest level in eight years. However, April also saw a cooling in other regions, bucking the recent trend of rapid price increases.

This weakness in prices was expected – we have been saying for some time that the sharp decline in house sales over the first three months of 2019 signalled weakness in prices further ahead.

Download The Full Weekly Commentary

Author

Westpac Institutional Bank Team

Westpac Institutional Bank

More from Westpac Institutional Bank Team

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.