Former Reserve Bank Governor Don Brash then said Auckland house prices needed to drop 60 per cent to achieve affordability. Brace yourself and imagine Auckland house prices falling 55 per cent. The Reserve Bank has done a test of just such an scenario, and quite recently. At the very worst, the Reserve Bank said it might have to stop some of them paying dividends to their parents in Australia. It's worth noting the Reserve Bank did not muck around with a simple scenario.

Source: New Zealand Herald July 16, 2016 17:03 UTC