Photo: Getty ImagesASB Bank is forecasting a 6 per cent drop in national house prices this year, in the face of a deteriorating labour market, falling net migration and rental declines. But the bank expects the property market to get back to current levels next year, on the back of cheap credit and a gradual recovery in the labour market. By way of comparison, during the 2008 global financial crisis, New Zealand's unemployment cycle moved from 3.3 per cent to 6.5 per cent, with house prices correcting by 11.9 per cent. "In addition, record low mortgage rates and debt relief from the mortgage holiday scheme may limit distressed sales to some extent, blunting the impact from the labour market deterioration on house prices." By contrast, Jones expected regions with more exposure to primary industries, such as Hawke's Bay, Waikato, Taranaki, Southland and Canterbury, to fare better.

Source: Otago Daily Times April 26, 2020 21:22 UTC