The housing market has a new problem: aging Kiwis
In these early years of the 21st century, no area of the New Zealand economy has excited more emotion than the housing market. The period from 2005 to 2007 was the era of soaring house prices and many paper fortunes were made by high income earners mortgaging themselves to the hilt and buying an investment property or three.
Then the subprime mortgage crisis hit, mortgage rates shot up as banks were looking at each other to see who was going to be hit the hardest. Liquidity is tight and it is much harder to borrow money. Mortgage rates continue to climb as the money supply dries up. House owners are agonising over how far values could fall. But an even bigger problem may be yet to come.
New Zealanders need to brace themselves for the end of the “generational housing bubble”. As the country's 1 million babyboomers retire, the housing market will change dramatically.
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