I posted the headlines here a little earlier: New Zealand – NZIER says slumping house prices a ‘significant risk’ to economic outlook

Here’s a follow-up:

  • New Zealand Institute of Economic Research is warning that the recent sharp fall in house sales poses a risk that could “put the brakes” on the currently strong economy

(Principal economist Shamubeel) Eaqub

  • said that house sales volumes lead economic growth by around six months. And sales have slumped by nearly 20% in the last six months
  • “A sudden stop in house sales could make banks more careful in lending. That would put the brakes on broader economic growth.”
  • He said that slowing growth in China was another risk, with over 20% of New Zealand exports going there.
  • Said that further interest rate hikes on top of the two that the Reserve Bank has already done this year were likely to cool the Auckland housing market, “A pause in hikes is possible after June, if the economy slows too quickly”
  • The RBNZ is “wary of causing a housing bust”
nzier