Property market at risk of 'sharp correction'

ROB STOCK
Last updated 05:00 01/03/2013

Relevant offers

Financial ratings agency Standard & Poor's says there is a significant risk of a property crash in New Zealand.

S&P, which has come in for criticism over its failures to adequately assess risk on many investments in the run-up to the Global Financial Crisis, said its "base case scenario" was for medium-term real estate prices continuing to stabilise at current levels.

But credit analyst Nico DeLange said: "We are of the opinion that a significant risk remains of a sharp correction in property prices occurring given the uncertain short-to medium term outlook for the global economy."

Such an event would have a flow-on impact on the ratings of New Zealand's banks. DeLange said: "This could potentially lead to a build-up of economic risks, resulting in the lowering of the economic risk score of New Zealand to ‘4' from ‘3'. Such a change could have a direct impact on the stand-alone credit profile of New Zealand banks, and the issuer credit ratings of banks in New Zealand."

Yesterday Finance Minister Bill English indicated new rules that could take some of the heat out of housing market could be in place by mid-year.

Ad Feedback

- The Dominion Post

Comments

Special offers
Opinion poll

What do you make of New World's Little Shop toys?

I agree with Gareth Morgan, toys are 'brainwashing' kids.

They're harmless fun.

They're educational.

Cunning marketing but not brainwashing.

Vote Result

Related story: Shopping giveaway 'harming children'

Featured Promotions

Sponsored Content