ANZ chief economist Sharon Zollner. Photo: RNZ / DOM THOMAS
Most Kiwis will see a forecasted drop in house prices as a relief, the country's biggest bank says.
ANZ has forecast house prices will fall by a total of 22 percent from their peak, or by 32 percent, when adjusted for wages.
ANZ economists measured the drop from when prices peaked at the end of last year.
They said it would take house prices to about 10 percent below pre-pandemic levels.
"When you think about it in terms of real house prices adjusted for wage growth, we are actually forecasting them to fall 32 percent." ANZ chief economist Sharon Zollner
ANZ's chief economist Sharon Zollner told Morning Report for most people, the drop would come as a relief and would see house prices drop "from those crazy levels".
The drop had the potential to "go off the rails" but if the decline happened in an orderly fashion, Zollner believed it would be a "great outcome" for the medium term.
However, it would take some jobs with it, she said, mostly in the construction industry.
Zollner said the country was already halfway through the forecast with houses down 12 percent - but prices were still at "silly levels".
But the forecast was "even more encouraging" when it was adjusted for wage growth, she said.
"When you think about it in terms of real house prices adjusted for wage growth, we are actually forecasting them to fall 32 percent."
That would see a drop a bit below pre-Covid levels.
From today, ANZ has raised its floating and fixed rate home loans between 35 and 65 basis points after last week's large increase in the Reserve Bank's cash rate.
The bank's floating mortgage will rise 65 basis points to 7.99 percent, with its cheapest standard fixed rate being a 12-month loan at 7.14 percent.