When I spoke here last year I discussed how falling housing prices was one of the factors that had contributed to sluggish growth in 2019. The dynamics in the housing market now look to be in a different phase, with prices rising across most of the country recently (Graph 11).
It remains to be seen how long this will continue, but sustainable increases in asset prices support household balance sheets and encourage spending through positive wealth effects. Higher housing prices can also encourage additional residential construction. But as housing prices rise again, we will be monitoring lending standards closely.