But yesterday UMR released results of a poll that found 60% of Aucklanders and 55% of home owners would prefer that house prices either fell a bit or fell dramatically over the next year.
The poll of 1,000 New Zealanders over the age of 18 was taken from July 29 to August 17 through UMR’s online omnibus survey and found a total of 63% nationwide who would either prefer house prices to ‘fall but not too much’ (37%) or to fall dramatically (26%).
UMR, which conducts polls for the Labour, found 55% of home owners would prefer house prices to fall a bit (40%) or dramatically (15%).
Here’s my problem with all this talk about lowering house prices. If prices fall, either ‘a bit’ or dramatically then won’t we also see people borrow less and save more and spend less (because they’re effectively poorer), leading to a drop in aggregate demand, leading to a recession? Isn’t that how these things work?