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