Bloomberg Economics has released its list of the world’s riskiest housing markets that are most vulnerable to a house price crash. Animal spirits are typically tamed when people are faced with higher repayment costs on an asset that’s losing value. “There is going to be some pain for sure.”New Zealand’s median dwelling price has already plunged 9.2% from the November 2021 peak with the stock of unsold homes also ballooning. This situation will change at the end of this year when these cheap fixed rate mortgage terms begin to expire and borrowers are required to refinance to significantly higher (double) mortgage rates. That is when the impact of the Reserve Banks monetary tightening will truly be felt across the economy via a sharp contraction in consumer spending.

Source: Stuff June 24, 2022 06:33 UTC