A report has been released by Investment bank Goldman Sachs which says there is a 40% chance the New Zealand housing market will see a price ‘bust’ in the next two years. This report has been described as exaggerated by one commentator.
• Economic commentator Michael Reddell said that a 5% fall in real house prices could only be described as a ‘bust’ in some sort of alternative universe.
• Concerns that the booming housing market could burst spectacularly, particularly in Auckland, have been circulating for many months. But most recent data, such as the latest REINZ data, indicates that market activity and house price growth is slowing at a sustainable rate.
• Reserve Bank governor Graeme Wheeler said the bank now projects that recent softening in house prices will continue and that price growth is likely to be in low single digit figures for the next few years.
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