The central bank yesterday released its Financial Stability Report which contained no new measures to containing housing demand. The bank said it was prepared to implement measures if needed. Concerns still lay mainly with Auckland prices.
ASB chief economist Nick Tuffley said the Reserve Bank had a "rather sanguine'' view on rising house prices outside Auckland.
"We had expected the Reserve Bank to be quite concerned about house price inflation outside of Auckland as last year's housing measures pushed a lot of activity into the regions.''
In the past six months, house price inflation in Hamilton and Tauranga had outstripped Auckland's. More recently, house prices in Wellington had come under pressure, he said.
Real Estate Institute figures out yesterday recorded the median price across Otago rose $24,000, or 9%, last month compared with April 2015, to reach a record high. Prices rose 9% in Dunedin and 1% in North Otago but fell 13% in South Otago.
Compared with March, the median Otago price rose $4000 (1%), with prices rising 13% in North Otago and 3% in Dunedin, but falling 30% in South Otago.
Sales volumes across the region rose 35% compared with April 2015, but fell 7% compared with March.
Mr Tuffley said the Reserve Bank seemed almost relieved to see that happening, as it represented a shifting of demand from Auckland.
At the same time, it saw the chances of prolonged price appreciation in the region as unlikely.
"The Reserve Bank is confident a supply response to increased regional demand would not be hamstrung as we have seen in Auckland.''
The central bank also noted house prices outside Auckland were growing from a lower base. As a result, it made the increases less of a concern from a financial stability perspective, he said.
By implication, nationwide investor lending measures might not be on the cards. ASB had believed the increased activity outside Auckland would mean any additional Auckland-focused macro prudential policies would be accompanied by tighter measures to discourage the spillover.
Yesterday's Financial Stability Report increased the likelihood Auckland-only measures would be introduced over coming months, Mr Tuffley said.
The official cash rate was still likely to be cut in June and August, to a low of 1.75%, but the risks remained the OCR cuts came at a slower pace. The weaker New Zealand dollar had also taken away some of the urgency to cut, he said.
