The end of the boom

  • House prices could start to fall by 2018 as debt-fuelled spending starts to catch up with the Kiwi economy, Westpac has forecast.

The bank said Kiwis were in a “borrow and spend” cycle that could not be sustained and it expected economic growth would slow from 2018.

Earlier this decade the Canterbury rebuild was ramping up and the dairy sector was booming, yet households were behaving cautiously, chief economist Dominick Stephens said in a quarterly report.

But that was in the past, he said.

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BOOM

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Debt-fuelled spending can only last another year or so before the consequences kick in, Westpac says.

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