• A surging housing market, low inflation expectations, and a strong exchange rate remain the Reserve Bank’s (RBNZ) major headaches, according to its annual report.

RBNZ Governor Graeme Wheeler said the country’s financial stability remained at risk because of an overheated housing market, with more than half of bank lending for property, and households carrying heavy debt loads.

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Reserve Bank governor Graeme Wheeler said a severe housing correction could pose risks to the broader economy. Photo: RNZ / Claire Eastham-Farrelly / Rebekah Parsons-King

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