What a wobbly global financial market could do to NZ housing

Policy makers and regulators alike have stepped up to contain systemic risk in the financial system, but it’s still too early to know if this saga is near being contained, or if further wobbles are yet to come, commentary in the ANZ Bank’s latest Property Focus. 

“Whether or not the current situation significantly worsens depends on whether we see wobbles among globally systemically important banks, and/or if these events lead to a broader shock to confidence in the financial system,” says Sharon Zollner, ANZ’s chief economist. 

For New Zealand housing, the potential impacts of these events stem largely from two channels: the direct and indirect impacts on credit conditions, and the direct and indirect impacts on the real economy - with plenty of overlap between the two.

But there are many moving parts and potential offsets, depending on the magnitude of the shock – which is still unknown, says Zollner.