House prices hitting new highs

Apparently house prices are hitting new highs, particularly in Auckland where they are up 25.4% year-on-year. The median house price in Auckland is now $771,000 so a 20% deposit equals $154,200 or about 30 times median household financial assets of about $5,000.

It will be really interesting to see what happens if prices start falling. If you read through how the ratings agencies assign ratings to Kiwi originated residential mortgage backed securities there are some really interesting details about mortgage underwriting in New Zealand and the intricacies of  gross loss estimates that more commentators should understand and think carefully about when reckoning about house prices.

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