Economies whose growth is significantly supported by debt-financed building of fixed investments, real estate, and infrastructure are particularly susceptible to large cyclical swings because the fast rates of building those long-lived assets are not sustainable. If you need better housing and you build it, the incremental need to build more housing naturally declines. As spending on housing slows down, so does housing’s impact on growth.
Except that for NZ we have a protracted shortage of housing at this time and for at least five years ahead? 21/09/2018 - will that shortage, despite unaffordable housing at low interest rates (4% - 20% deposit on a 900k home, overcome that cycle? Presumably housing does not stimulate economic growth, so if interest rates grow and we’ve lent to risky debtors, then we’re in trouble
