Economics
Housing Frenzy in New Zealand Exposes Perils of Ultra-Low Rates
- First-time buyers miss out as prices surge at packed auctions
- Government puts pressure on central bank amid political heat
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A housing frenzy at the bottom of the world is laying bare the perils of ultra-low interest rates.
At a packed auction room in Wellington, New Zealand’s capital city, houses are selling for hundreds of thousands of dollars above their government valuations. A young couple hoping to buy their first home -- a basic three-bedroom dwelling built in the 1950s -- are forced to bow out as the bidding approaches NZ$1.2 million ($850,000).