About 12-18 months ago I recall posting in a thread an observation that NZ has previously had a property linked down turn. However, not for the want of searching could I recall where I had read about it...........Well Here is the info. Note The 1890s troubles were not just Auckland based but NZ wide there were some interesting parallels with the current situation. Heres the relevant info it is from
The legal history of money in New Zealand
Ken Matthews, Financial Stability Department ( reserve bank bulletin)
The 1890s was a period of economic depression in New
Zealand and elsewhere. In the early part of this decade, the
banks operating in New Zealand, particularly the Bank of
New Zealand, were in financial difficulties. According to
Sinclair27, the banking crisis was caused by the banks
supporting speculative ventures in real property, the price of
which fell. Bedford saw three main causes for the crisis:28
“1. The Public Works and Immigration Policy
inaugurated by Sir Julius Vogel.
2. The pressure unceasingly exerted on the banks
by the public to depart from legitimate banking in
order to secure more liberal accommodation.
3.The competition of the numerous Loan
Companies.”
Bedford comments that, from the beginning of settlement,
the colonists wanted more loans from the banks than the
banks were prepared to give, such loans being required to
finance the development of infrastructure. The government
was borrowing beyond its available means of repayment,
relying on exploitation of the latent wealth of the colony to
make future repayments. The banks, taking their lead from
the government, did the same.29 Unfortunately, the means of repayment did not eventuate as readily as anticipated.
The legal history of money in New Zealand
Ken Matthews, Financial Stability Department ( reserve bank bulletin)
The 1890s was a period of economic depression in New
Zealand and elsewhere. In the early part of this decade, the
banks operating in New Zealand, particularly the Bank of
New Zealand, were in financial difficulties. According to
Sinclair27, the banking crisis was caused by the banks
supporting speculative ventures in real property, the price of
which fell. Bedford saw three main causes for the crisis:28
“1. The Public Works and Immigration Policy
inaugurated by Sir Julius Vogel.
2. The pressure unceasingly exerted on the banks
by the public to depart from legitimate banking in
order to secure more liberal accommodation.
3.The competition of the numerous Loan
Companies.”
Bedford comments that, from the beginning of settlement,
the colonists wanted more loans from the banks than the
banks were prepared to give, such loans being required to
finance the development of infrastructure. The government
was borrowing beyond its available means of repayment,
relying on exploitation of the latent wealth of the colony to
make future repayments. The banks, taking their lead from
the government, did the same.29 Unfortunately, the means of repayment did not eventuate as readily as anticipated.
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