Consumer Price Inflation and House Prices

house prices: "Although it has not been a major factor in recent years, high rates of house price inflation can spill over into stronger spending and pressure on consumer price inflation. And the more that house prices get out of line with historic relativities, the greater the risk of a sharp correction, leading to financial instability," Wheeler said in a published speech in Christchurch, according to Global Times China. As Australia and China were New Zealand main trading partners, accounting for 38 percent of merchandise exports, New Zealand was also vulnerable to any major downturn in China as China was also Australia main trading partner and While the New Zealand economy was performing well, it faced five main risks and uncertainties, relating to the Chinese economy, and four key prices - dairy prices, oil prices, house prices and the exchange rate, governor Graeme Wheeler said.Housing pressures were most intense in the two biggest cities of Auckland and Christchurch, and while the housing shortages in Christchurch were expected to be resolved, house price inflation appeared to be rising again in Auckland. (news.financializer.com). As reported in the news.