There has been much discussion around the increasing pace of house price inflation in New Zealand. We at the Reserve Bank have been highlighting the risks for financial stability and potentially also for broader price stability if house prices continue to accelerate. The strong housing market is starting to underpin household demand but, with some slack still in the economy, this cannot yet be described as a threat to overall inflation. Our most recent projections show CPI inflation trending gradually back towards the mid-point of our target band. We are also well aware that any Official Cash Rate (OCR) increases at ... (full story)