The New Zealand housing market is poised for its biggest downturn since the GFC, here are the positives and negatives Tony Alexander writes about on an article found on





A baby boom

"Come December and January there is likely to be a baby boom as people engage in relations whilst in lockdown. This will necessitate some upgrading of house size for some families."

Job losses

"Absence of income means inability to raise a deposit, get a mortgage, and perhaps even continue to keep the house one already owns."

Low mortgage rates

"Mortgage rates were at record lows heading into this recession, they have gone lower, and they probably will not go up to any noticeable degree for three years."

Loss of job security

"Even people in work will feel reluctant to purchase large items like cars, couches, and houses..."

Higher long-term net migration

"We know that events such as this which turn people’s worlds upside down can have profound impacts on long-term lifestyle choices. There is a strong possibility that many of the one million Kiwis offshore plus their partners and children will choose to live back here."

Temporary working visa foreigners not needed

"Most will leave in the coming year. This is good for Kiwi employment. But it means housing is no longer needed for these people."

Working from home

"Many more people will be doing this after lockdown than before, on a permanent basis. The extra time spent at home may lead some to shift further from the city centre for more space."


"To improve their ability to service debt some people will seek to trade down to a less expensive property."

Apartment living

"After being confined in an apartment for 4-8 weeks, some people may want to swap for a house."

Temporary net migration stalling

"For the rest of this year it seems valid to assume no foreigners will be able to shift here."

Less outbound travel

"Just as fewer people long-term will visit here, so too will fewer of us holiday overseas..."

Loss of retirement wealth

"Some retired people have seen their investment portfolios lose value. To improve their cash flow position some may downsize their house."

Young people saving

"Much attention has been made to reduced deposits for those young people who were going to use their KiwiSaver funds but who were in the wrong type of fund. But now they are realising how quickly a deposit can be built without spending $100 a week on coffee."

Student apartments

"Inner-city apartment rents and prices will fall in the absence of many foreign students this year..."

Construction slump

"No new houses are being worked on for 1-2 months. This means slower supply growth."


"The complete absence of tourism this year and the much lower numbers of inbound travellers for years to come will bring Airbnb dwellings back to the market..."

Lower household debt than previous crises

"Household debt rose just 40% in the past five years versus 80% in the five years leading into the GFC, and 115% leading into the 1997/98 Asian Crisis."

Non-bank lenders downsizing

"New lenders, especially out of Australia, have been expanding their activities in New Zealand over the past year. Now they are pulling back."

This recession is temporary

"We know some sectors have essentially gone, and the downturn this Autumn – Winter will be deep. But we can reasonably believe a vaccine will appear at worst 16 months from now if the scientists are correct."

Bank lending

"While lending on houses is a low risk activity for a bank, they will pull back from the market slightly."

Stimulus measures

"There is simply nothing else in history which compares with the fiscal and monetary guns being brought to bear."

KiwiSaver funds down

"Young people will have to delay their purchase for perhaps 6 – 12 months"."

Mortgage Holidays

"Anyone under stress can put their principal and/or interest payments on hold for up to six months. After that many will find their debt is still too burdensome and politely forced sales are likely to rise."

Government bias toward tenants

The rent freeze, and no evictions extension could be "a surprise" to some landlords.

Working visas

"As most of the 200,000 people here on temporary work visas leave in the coming year or so, and jobs will have to be offered to Kiwis."

Falling rent

"Reduced employment, visa holders leaving, students not arriving, suggest rent assumptions will need to be redone."

Labour shortages

"Eventually, the shortages of labour in many sectors will attract Kiwis and help soak up some of the unemployed."

Pullback from regions

"Over the past four years, investors have switched their focus from Auckland out to the regions. We’ve seen this before; it often does not end well with over-supplies revealed in some locations."

Preference for property

"Just as baby-boomers avoided shares following the 1987 crash and decimation of their wealth, so too will a new generation perhaps look more favourably at property as a long-term investment."

Few aspirational purchases

"When the small to medium-sized business sector does well, owners buy holiday homes, homes in wealthier suburbs, homes in elite school zones, homes on the coast."

Property shortage

"This main centre shortage means not just a physical shortage of property, but a shortage of listings also, Given the low interest rates and mortgage holiday it is extremely unlikely that listings will massively surge when our economy opens up again."


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