Both of these measures produce a squeeze in the domestic money supply and therefore in credit demand, which ultimately reduces the demand for goods and services in the real economy. In the long run, sustainability is restored through the imposed reduction of relative prices and wages.
Average rental yields in Auckland have fallen from 4.6 percent in 2010 to 3.7 percent in 2014. Residential investors have continued to expand their interest in housing as rental returns have declined. This points to an excess demand for home ownership over and above the simple excess demand for accommodation. 4.