RBNZ’s Orr: Unsustainable house prices poses financial challenges

The Reserve Bank of New Zealand’s governor, Adrian Orr, stated that the unsustainable level of house prices has imposed monetary, financial stability challenges on the country’s economy.

House prices and housing affordability are affected by both supply and demand. Prices have become more unsustainable since November 2020.

Domestic banks are working to consulting house seekers as well as residential loan seekers on additional debt servicing ratios. Orr said that the country is expected to witness an easing in house prices over the medium term.

On Monday, the New Zealand Building Permits for September was released with a decline of -1.9% m/m, while the prior reading was +3.8%.