If you are in Auckland or Wellington, the current property market slump is one of the worst in New Zealand’s history. The REINZ house price index, which came out on Thursday, fell by 0.5% in seasonally adjusted terms in July. A decade ago, when house price rises were in overdrive, the RBNZ ran stress tests that looked at the impact of house price falls of both 20% and 30% on the banking system. We are clearly, as the RBNZ and many others (including myself) warned, overly reliant on the property market to bolster our economic growth. The idea of an extended property sector downturn that helps revitalise the productive is nice in theory.

Source: New Zealand Herald January 03, 2026 22:32 UTC