Key Facts

  • The government continues to express concerns about the high housing prices in New Zealand.
  • Financial measures are being formulated by the government to cool down the property market.
  • The raising of interest rates is one of the possible measures under discussion.
  • Inflation, unemployment rate, and imported price pressures are other relevant factors to consider.
  • The government is also contemplating mortgage restrictions, along with nature and timing of fiscal stimulus.
  • Fears are heightening that small businesses may suffer if too much pressure is placed on the property market.

Article Summary

The New Zealand government is intensifying its efforts to curb the escalating housing prices nationwide. The high prices are causing great concern and the government is in the process of developing several financial strategies in an attempt to stabilize the property market. One of the possible measures includes raising interest rates.

The inflation figures, unemployment trends, and imported price pressures might influence the government’s decision on these measures. Decision-making is complex in this context, as multiple economic variables must be accounted for. A balance needs to be struck to prevent a severe impact on the economy.

Advanced mortgage restrictions, as well as the nature and timing of additional fiscal stimuli, are also under consideration by the government. However, there are growing fears that such strategies may leave small businesses in the lurch. If pressure on the housing market is too intense, it might affect other sectors of the economy negatively, particularly the smaller entities who are striving to recover from the economic shocks caused by the Covid-19 pandemic.

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