PHOTO: A three-bedroom home in Sunnynook sell for $2.33 million at auction. Credits: Image- Getty
Officials say house prices falling would be the “worst-case scenario” for our economy while it recovers from a recession.
Reserve Bank (RBNZ) chief economist Yuong Ha referred to house prices falling as a “deterioration of wealth”, which could not be afforded during the COVID-19 economic recovery.
“The worst situation we could face right now would be to see house prices fall,” Ha said.
“That’s always the flipside, would you be dealing with a COVID recovery and a disruption of wealth in lower house prices.”
The RBNZ is preparing to implement never-used-before measures to drop interest rates for loans like mortgages even lower, including a negative official cash rate and giving money to banks at a cheaper rate.
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