/biz/ - Business & Finance

>>49734559
>How do house prices go down?
interest rates roughly dictate how much someone can borrow, at the moment people treat their housing price range by how much their monthly repayments would be on the loan.

we can use new zealand as an example because i was looking at it the other night. 1 year ago a 500k loan would have cost about 3400 per month in mortgage repayments, right now that same loan is around 4100 to pay.

imagine this happens to millions of people simultaneously, many will be forced to sell their existing house because they cant afford the repayment costs (this is if they are lucky, the unlucky ones will have it taken off them by the bank eg 2008).

tl;dr = more housing supply means prices go down, plus people cant afford to bid higher prices so double whammy