Housing market slowdown
The risks of a sharp slowdown in the housing market are rising and the speed and size of any fall is the biggest uncertainty facing the economy, Arcus chief economist Rozanna Wozniak says.
The economy is expected to deteriorate, with the "worst yet to come", according to New Zealand company Arcus Investment Management, part of the AXA group.
Both the housing market and the Kiwi dollar were well over-valued and defying fundamental factors, Ms Wozniak said yesterday at a quarterly investment briefing in Wellington.
House prices have risen about 60 per cent in the past four years and a recent Westpac Bank report suggested the market was about 20 per cent over-valued for investors.
High inflation expectations had become entrenched in the housing market, with some investors thinking the market was "bullet proof".