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Opinion
Lionel Laurent

Millennials’ Real Estate FOMO Goes Haywire

Survivalism, stimulus and the search for space make it easy to ignore warning signs.

More than just a fixer upper

More than just a fixer upper

Source: Ray White Green Bay

Here’s a word to add to your investing vocabulary: Dungers. The term for dilapidated, crumbling houses comes from New Zealand, which is in the grip of a striking property boom. The country topped Bloomberg Economics’ risk radar in June for being the most unaffordable housing market in the world. Judging by the dunger that sold for NZ$1.8 million ($1.3 million) in January, quality is no obstacle — and neither is price.  

It’s something that policymakers everywhere should watch closely. Not because New Zealand is a systemic risk, but because property markets are running hot around the world in similar ways. What began as a stimulus-fueled search for a better quality of life has morphed into a frenzy driven by a Fear of Missing Out (FOMO) that can boomerang on buyers when excitement cools, all while making housing less affordable.