In turn, Goldman’s “base case is that residential investment will peak in 2H2022, before falling by around 13% by late 2024”. New Zealand dwelling prices have already “fallen by 11% from the 4Q2021 peak (with Auckland prices down 16% from peak)”, whereas “sales volumes have eased to levels last seen in 2011”. And Goldman believes that “dwelling prices will continue to decline alongside higher mortgage rates”. The forecast 20-25% decline in New Zealand house prices based on the REINZ house price index would be the largest on record (see right-side chart directly above), surpassing the 2008-09 Global Financial Crisis crash. It would also arrive just in time for next year’s election, and could see Prime Minister Jacinda Ardern thrown out of office.

Source: The Guardian September 05, 2022 17:25 UTC