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Highly leveraged investors are rushing in to buy houses, contributing to an unexpected housing boom, analysis by ASB has revealed.
In April the bank forecast a 6 per cent drop in national house prices this year, in the face of a deteriorating labour market, falling net migration and rental declines.
But it is now expecting house prices to rise 12 per cent in the year to June 2021.
"The turnaround in the fortunes of the housing market since lockdown has been remarkable," ASB senior economist Mike Jones noted in a housing insights note released today.
"We now see prices sustaining their recent momentum, with annual house price inflation tipped at 12 per cent by June of next year."
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