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OECD Urges New Zealand To Address Soaring Housing Prices

The Organisation for Economic Cooperation and Development said more measures are needed in New Zealand to increase housing supply and improve affordability as sustained house price growth lifted household debts.

The main risks to outlook are rising trade restrictions and a housing market correction, the OECD observed in its Economic Survey of New Zealand, released Tuesday.

According to OECD, reforms to increase housing supply responsiveness to demand would improve affordability, enhancing well-being.

Further, OECD said the economy is projected to grow about 2.5 percent this year and next. Economic growth is projected to remain close to potential.

Macroeconomic policy is expansionary, while fiscal policy is set to become broadly neutral, the OECD noted.

The report cautioned that rising trade tensions internationally could have substantial negative repercussions as a small open economy without a large domestic market and heavily exposed to international commodity prices.

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