Housing prices pose risk to New Zealand’s financial stability

Central bank’s governor Adrian Orr says house prices are currently unsustainable and pose risks to the country’s financial stability, RNZ reports. Homes in New Zealand are the most unaffordable among OECD nations, with prices soaring about 30 percent in 12 months due to an acute housing shortage, historically low interest rates and cheap access to capital from the government’s pandemic-driven stimulus spending. “Houses have been scarce at a time that demand was strong. The reverse is now evolving – with housing building at record levels at a time that population growth is static,” Orr said.