Be the 1st to hear about new developments

Assured Property Investments Assured Property Investments
  1. Current Listings
  2. Past Developments
  3. News & Guides
  4. Customer Stories
  5. Community Involvement
  6. The Property Development Club
  7. About Us
  8. Contact
07 823 2525
Author John Kenel9 December 202212 Dec 2022

Economy

John Key doesn’t expect the NZ housing market to drop away from here

FULL ARTICLE FROM NZHERALD BELOW:

What it would take to ‘really crack’ NZ’s housing market: Sir John Key

By Lincoln Tan

Sir John Key says two big things will have to happen for the New Zealand housing market to really crash – interest rates need to skyrocket and the job market completely fall apart.

The former prime minister and ANZ NZ chairman was speaking in a Facebook video for his son Max Key’s property development company.

New Zealand is currently facing high inflation, skyrocketing cost of living and falling house prices.

The annual inflation rate sits at 7.2 per cent in the September quarter, which is well above the Reserve Bank of New Zealand’s 1 to 3 per cent target. As a result, the RBNZ has been steadily increasing the Official Cash Rate which is currently at 4.25 per cent.

According to the latest figures from the Real Estate Institute of NZ (REINZ), inflation and rising mortgage costs have led to house prices dropping 7.5 per cent annually.

Median house prices across the country fell from $892,000 in October 2021 to $825,000 in the same month this year, and the decline has caused concern for homeowners – some of whom are facing the possibility of negative equity.

But Key believes the housing market was unlikely to crash despite what was happening in the property market. He said for people to roll over, the need for further aggressive increases could be mitigated.

“One thing that’s really interesting at ANZ, of our customers who borrowed for a home loan up until about a few weeks ago, 57 per cent of them still had a mortgage that either had a two in front of it or three in front of it,” Sir John said.

“So they’re going to have to roll off very soon in the next six months and when they roll off they’re going to roll off onto something with a six in front of it, maybe even higher. So you can’t tell me that isn’t going to have a dramatic impact on people’s capacity to go out and buy everything from pizzas to a new frock.”

He said even if New Zealand goes into recession, which could happen in 2023, the property market was unlikely to crash.

“When we look at recessions we look at property at ANZ and there are only two things we worry about, do people have a job and how much are they paying for the money?

“At the moment unemployment’s down at 3 per cent. Well, when I came in as Prime Minister in 2008, the first thing Treasury told me was they expected unemployment to peak at over 10 per cent, that’s over three times, four times what you see today. Now I don’t think you will see anything like that in New Zealand going forward.

“I think maybe (unemployment) rises a bit, maybe it goes to 3.5 or 3.7, maybe a few people get laid off, but I don’t think it’s anything like that.”

Key said for it to “really, really, really get the property market to really crack, you’d have to have interest rates going through the roof from here and you’d have to have labour markets going through the floor”.

“We do all of that stress testing of our balance sheet at ANZ and even then we see property prices down obviously from where they are and pretty significantly down but that’s Armageddon,” Key added.

Source: NZ Herald

 

 

Author John Kenel9 December 202212 Dec 2022
  • Facebook
  • Twitter
  • #business
  • #demand
  • #economy
  • #Hamilton
  • #Hamilton city council
  • #housing
  • #housing market
  • #housing shortage
  • #housing-changes
  • #housing-nz
  • #property
  • #property managers
  • #rental market
  • #rental-homes
  • #rentals
  • #supply
  • #supply-and-demand
  • #tenants

More news

Author John Kenel15 May 2025

88 Billion in new Taxes from the Greens

Let’s break that down. There are around 5 million people in New...

Read more

Author John Kenel15 May 202505 May 2025

Building Pulse Podcast – Part 2 of 2

Innovation Is Possible - If We Let It Happen After laying out...

Read more

Author John Kenel13 May 202505 May 2025

BuildingBuilding Pulse Podcast – Part 1 of 2

With over 20 years in property development and over 1,000 homes delivered,...

Read more

Featured properties

Home

sold

3 bedroom duplex

Brand new quality homes

Bedrooms 3
Bathrooms 1
Garage Single1 garage

Townhouse

sold

2 & 3 bed townhouses

City Living on River Ridge, Hamilton

Bedrooms 3
Bathrooms 2
Garage Single1 garage

Townhouse

sold

2, 3 & 4 Bedroom Townhouses

Townhouses on Te Rapa

Bedrooms 3
Bathrooms 3
Carparks 2

Assured Newsletter

Be first to know about
new developments

free

new

The Hamilton Property Guide

2024 issue edited by John Kenel, Assured Property

View here
  • Home
  • Current Listings
  • Past Developments
  • News & Guides
  • Customer Stories
  • Community Involvement
  • About Us
  • Contact
  • Privacy Policy
  • Facebook
  • Twitter
  • LinkedIn

Visit

63a Alpha Street, Cambridge
Monday - Friday (9am - 5pm)

Contact

info@assuredproperty.co.nz 07 823 2525

© 2025 Assured Property Investments. 

Site by Brontë + Benek