ii)  Risks in the domestic housing market  Numerous measures indicate that New Zealand house prices are significantly inflated relative to usual valuation indicators. IMF data show that New Zealand had the third highest real increase in house prices among 64 countries in the year to June 2016.
More than the fact of default, some of the market practices that have come to light through media reports can dent the confidence of investors in the market. This particular instance reiterates the importance of strong market practices and institutional frameworks in development of healthy markets. 35.