Economists have predicted a world of pain for property owners: house prices dropping by double digit percentages and a rental market that doesn't look much better.
Treasury has developed scenarios of double-digit unemployment. Some investors believe if rents don't fall to match the reduced incomes of tenants the conversion of unneeded office blocks to residential apartments or a flood of Airbnbs might do the job.
Kiwibank economist Jarrod Kerr has predicted house prices could fall by up to 10 percent this year. Or almost 20 percent in a "downside" scenario.
Infometrics economist Paul Barkle had a similar prediction of a 5-10 percent decline. He said an oversupply of housing was on the cards with border closures leading to a "massive" slowdown in population growth. ANZ has forecast house price deflation of 10-15 percent, although that would only take prices back to where they were 12 to 18 months ago.
Good. And if it forces current house-hoarders to sell at a loss, even better. But if we're to make the most of this, and make housing affordable again, the government needs to follow up with a mass zero-energy state-house building scheme, to provide warm, dry homes for all and drive private landleeches and their overpriced hovels out of the market completely.