New Zealand and Canada housing markets face corrections

New Zealand and Canada have experienced significant real estate market corrections following a decade of rapid price growth driven by low interest rates and high liquidity. In New Zealand, inflation led the central bank to raise policy rates to 5.5%, contributing to a real housing price decline of approximately 30% from 2022 peaks. Economic recession and outward migration to Australia have further dampened demand.

Canada saw similar trends with interest rates reaching 5%, resulting in a roughly 20% drop in real property values. While Canada previously relied on high immigration to support housing demand, recent government restrictions on immigrants and international students, combined with a mismatch between new apartment supply and declining demand, have pressured the market. Some developers now face challenges with unsold inventory, prompting government discussions regarding the acquisition of unsold homes for affordable housing initiatives.