Originally Posted by
SBQ
As i've eluded many posts aga in this thread, the key problem isn't macro economics. The key problem is somewhere, some time, the rich (the haves), need to put their wealth into something. I'm afraid in NZ, that is none other than owning houses (plural). Our tax laws favour it and when I sat through every major stock market crash (dot com, 2008 GFC, etc), NZ house prices have done thing but go UP.
Recessions won't kill it. I will even say it's not even a housing bubble because NZ operates on a different world. Like the Japan bond market, NZ houses are insulated to global changes. When our gov't has created a mix where they're too scared to do the right thing in squashing housing prices, they put all the cards in houses and make damn sure that it stays protected.
So what if interest rates go up. It just means people won't sell their houses and wait. I've seen that rising interest rates in NZ do not affect housing prices much compared to abroad. If that was a concerning model, then we would not see so many foreign banks operating in NZ to get their fingers into the NZ housing market pie.