Why New Zealand and Canada’s Housing Crashes Outpaced Australia’s Market Decline

The property booms in New Zealand and Canada surged over 150% since 2010, only to reverse sharply after each country pursued aggressive monetary tightening following the Ukraine war. New Zealand’s central bank pushed its cash rate to 5.5%, while Canada’s reached 5%, both well above Australia’s 4.35% peak, leading to price declines of roughly 30% and 20% after inflation. Elevated unemployment—7% in Canada and a youth exodus from New Zealand—reduced housing demand, and Canada also grappled with U.S. tariff impacts.

Australia’s milder rate hikes, combined with sustained net migration, have kept its market more resilient, though recent policy shifts are prompting a buyer retreat. Cotality argues Australian households have sufficient reserves to weather a shock, yet a prolonged slump could erode wealth and consumer spending. In response, Canadian officials, including Prime Minister Mark Carney, are considering purchases of unsold apartments for affordable housing, while New Zealand’s market shows little sign of recovery despite ongoing supply shortages.