NZ's housing market is "now in the minds of economists the world over," expert says
Global economists are keeping their eyes on New Zealand’s housing market downturn in what could be a “warning to the world.”
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This was according to the UK business media outlet The Financial Times in its video last week, titled “NZ House Market – Warning to the World.”
While discussing the 34% rise in the nation’s house prices after the COVID-19 pandemic broke out, Nic Fildes, FT Australia and Pacific correspondent, said NZ’s market was a “canary in a coal mine for other markets concerned that a housing crash may be on the horizon,” Newshub reported.
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A combination of stricter lending, more housing, and increasing mortgage rates has led to a 3.5% decline in house prices in New Zealand this quarter.
In the FT video, Fildes said NZ’s housing market was “now in the minds of economists the world over.”
He identified the country’s rising interest rates as a key factor behind falling house prices.
“That is where other markets including Australia, the UK, and the US have started to pay heed to what we should perhaps call, ‘The Kiwi in the coal mine,’” Fildes said.
According to CoreLogic’s recent report, last month’s house prices had slumped at double the rate of July – down 1.8% from the previous 0.9% drop.
Nick Goodall, CoreLogic's head of research, said New Zealand's housing market downturn was now evident across the country.
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The latest Real Estate Institute of New Zealand report showed a nearly 5% fall in house prices year-on-year in July – first annual drop since 2011, Newshub reported.
