New Zealand house prices


The expected nine per cent fall in house prices could “potentially” be worse, says Reserve Bank Deputy Governor Geoff Bascand.



Reserve Bank Deputy Governor Geoff Bascand says it would still need a bigger fall than that to leave households really stretched. Source: Q+A

However, it would still not be enough to leave households “really stretched” as the country begins its economic recovery after the Covid-19 lockdown.

Mr Bascand told TVNZ1’s Q+A with Jack Tame that a 9-10 per cent fall in house prices, forecast last month, was almost the Bank’s baseline assumption.

“Potentially, it could be worse than that.

“We find it hard to believe – with lower immigration, prices where they were so high in the first place and with households suffering from unemployment – we’ll get the same buoyancy in the housing market,” he said.

At a 9-10 per cent drop, households would be “generally OK in terms of net equity… Most households have got 20 per cent equity or more in their houses.”