Such a fall, potentially triggered by an external financial shock, could cause real  BIS central bankers’ speeches  1  damage to New Zealand’s financial system and broader economy. Figure 1 shows that house prices are high relative to household disposable incomes and rents, even though they have eased from their 2007 peak.
On these sorts of measures, the OECD estimates that New Zealand house prices are 25 percent above their long-term averages. Figure 1: House prices relative to income and rents  Source: Quotable Value Ltd., RBNZ, Statistics New Zealand, Ministry of Business, Innovation and Employment. From this high starting level, New Zealand house prices are now rising rapidly once more.