Property plunge: The ‘no longer wealthy’ effect
ANALYSIS: In the third of our five-part series, we examine how property prices affect the wider economy.
Karyn Scherer
Wed, 05 Aug 2026
Hot Topic
PROPERTY
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Key points
- What’s at stake: Major sectors of the economy, including retail, hospitality, construction, aged care, banking, and media, are feeling the pinch from an unprecedented slump in property prices.
- Background: Economists have been debating for years what impact the ‘wealth effect’ has on consumer spending.
- Main players: Arthur Grimes, Robert Kirkby, Rob Everett, Michael Rehm, Retail NZ, Restaurant Association, ANZ, BNZ, ASB, Westpac, Auckland Council.
If Sir John Key is correct, the main problem with New Zealand's economy is house prices.
“The guts of what’s wrong is that the housing market is going down, not up,” Key reportedly told a business audience in Auckland last year. “When house prices go up, everybody tells the pollsters, ‘Oh
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Karyn Scherer
Wed, 05 Aug 2026
Contact the Writer: karyn@nbr.co.nz
News tip? Question? Typo? Let us know: editor@nbr.co.nz
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Key points
- What’s at stake: Major sectors of the economy, including retail, hospitality, construction, aged care, banking, and media, are feeling the pinch from an unprecedented slump in property prices.
- Background: Economists have been debating for years what impact the ‘wealth effect’ has on consumer spending.
- Main players: Arthur Grimes, Robert Kirkby, Rob Everett, Michael Rehm, Retail NZ, Restaurant Association, ANZ, BNZ, ASB, Westpac, Auckland Council.
Property plunge: The ‘no longer wealthy’ effect
NBR Focus,Property,
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