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It didn't start 2 years ago, because interest rates weren't biting enough, so all the fringe (sub-prime) lending the banks and finance companies were doing hadn't started to tip over.
BNZ started a price war that kept rates artificially low, and created false confidence in the investor market. so people kept buying, and that kept the market bouyant.... Finally rates caught up and the fringe lending became unnaffordable, and all of sudden there was no new equity to top up against. All the investors and developers who had been using the capital gains to fund the projects had nowhere to go, and the rest is history...
BNZ started a price war that kept rates artificially low, and created false confidence in the investor market. so people kept buying, and that kept the market bouyant.... Finally rates caught up and the fringe lending became unnaffordable, and all of sudden there was no new equity to top up against. All the investors and developers who had been using the capital gains to fund the projects had nowhere to go, and the rest is history...
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