Introduction  Housing is a key sector of the New Zealand economy, and an important factor influencing the Reserve Bank’s monetary and financial policies. And of course housing is never far from the front pages. Since 2012 we have seen rapid rates of house price inflation, reflecting a demand – supply imbalance.
While the least profitable 25 per cent of companies are making losses, returns on equity for this group have risen slightly over the past few years. These companies, however, tend to have very little debt overall so there is little potential for flow-on effects to the financial sector.