With rural NZ and areas set to benefit from the reopening of international tourism likely to fare better than most
Economic growth is tipped to ease in the year ahead, but rural New Zealand and areas set to benefit from the reopening of international tourism should fare better than most, according to Westpac.
In its latest regional economic forecast, the bank said rising interest rates and falling house prices will weigh on all regions to different degrees.
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Auckland, Wellington, and Manawatū had the worst-performing housing markets in the country over recent months, with Westpac predicting house prices in these areas would continue to underperform the national average, while Gisborne and Hawke’s Bay have been identified as among the regions that might face a “reckoning” in the housing market in the months ahead, Stuff reported.
Auckland was vulnerable because a large proportion of home buyers in the city were investors, which meant they were most sensitive to rising interest rates, Westpac said.
Other regions were predicted to do a bit better, including the top of the South Island, which was better protected by its larger proportion of lifestyle properties and retirees living in that area.
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The bank also said house-building activity should hold up for a while in most regions, including Wellington, despite the housing market downturn.
“Consents are high and most regions have a large amount of work still in the pipeline,” the bank said. “Shortages of materials and increasing absenteeism will merely extend that out further into the future. That in turn should support regional manufacturing, particularly in places like Auckland and Canterbury.”
Westpac expected all regions to benefit from the reopening of international tourism, with Otago – “and to a lesser degree Auckland” – set to benefit most from that, Stuff reported.
“Similarly, returning international students will boost spending in Dunedin,” it said, adding that it should help Otago “close the performance gap” on other regions.
Westpac said Southland and Northland would likely outperform the national average for economic growth, driven by robust agricultural and aluminium prices, and Canterbury would at least hold up well compared to the other big metropolitan regions, Stuff reported.
