PHOTO: TIM BOYLE/GETTY New Zealand’s housing market bubble has become armour plated and impossible to burst, despite the predictions of overseas experts.
ANALYSIS: New Zealanders usually welcome the praise when overseas authorities describe us as the best in the world.
This time, not so much.
In the past fortnight, global economic news authorities The Economist and Bloomberg Economics have both declared New Zealand houses to be vastly over-valued relative to both rents and incomes.
They describe New Zealand as in bubble territory similar to those seen in other countries before the Global Financial Crisis and vulnerable to the sort of 30-40 per cent price crash seen in the likes of Ireland and parts of the US through 2007 to 2010.
The Economist’s long-running Global House Price Index was refreshed on June 27 with March quarter data for most countries and showed New Zealand top of the pops when it came to over-valuation relative to incomes and second most over-valued relative to rents behind Canada.
It found New Zealand prices in the December quarter of 2018 to be 57 per cent over-valued relative to rents, just above Australia’s 42 per cent overvalued in the March quarter.
New Zealand was 113 per cent over-valued relative to rents, just behind Canada’s 120 per cent, The Economist found.
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