Getting real about the coming recession

Getting real about the coming recession
As home values sink and mortgage costs rise, an economy based on housing wealth faces recession. (Image: Getty)
Pattrick Smellie
For some unknown reason, one of the scariest sentences in last week’s financial stability report from the Reserve Bank of New Zealand seemed to attract very little attention.In a box to the side of the official commentary, the central bank observed that if residential mortgage rates were to reach a prevailing rate of 7%, “46% of 2021’s mortgage borrowers would need to spend at least half of their after-tax income on interest payments”.In other words, nearly half the people who borrowed for houses at the top of the market...

More Economy

What ‘responsible tax relief’ looks like
Economy

What ‘responsible tax relief’ looks like

'This relief is well overdue,' finance minister Nicola Willis said.

Gregor Thompson 30 May 2024
Budget 2024 delivers says finance minister Willis
Economy

Budget 2024 delivers says finance minister Willis

The government expects a surplus in the year to June 30, 2028.

Rebecca Howard 30 May 2024
Business confidence dips in May but inflation expectations ease
Economy

Business confidence dips in May but inflation expectations ease

A net 11.2% of firms were optimistic about the general economic outlook. 

Rebecca Howard 29 May 2024