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3 Comments
Its definitely a possibility.
Looking through the history of periods of asset price destruction, the majority of price destruction happens during the recession as interest rates are falling, not while they are rising.
So people should be aware that what we've seen with our housing market could just be (and note I say could) the opening scene of the show, and the main event is still ahead of us.
I'm not saying this as a prediction, but just saying that in the past, the majority of falls are experienced during the recession, which we are yet to enter, and inverted yield curves are saying that it is coming (and have almost always been right - with very few exceptions).
So it is a view people should be open to and not completely dismiss as 'impossible'. To say it is impossible, would be more people saying 'I don't want it to happen because it would hurt me financially' than dealing with the reality that these types of things have happened before so there is no reason why they shouldn't happen to us here in NZ (we aren't special or immune).
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