Despite announcing this week that the country has, for now at least, beaten the coronavirus, New Zealand is still facing potentially large falls in property prices, according to the Reserve Bank Deputy Governor Geoff Bascand.

The expected nine per cent fall in house prices could “potentially” be worse, he said, adding that the 9-10% fall in house prices forecast last month by the Bank was actually the baseline assumption.

“Potentially, it could be worse than that. We find it hard to believe - with lower immigration, prices where they were so high in the first place and with households suffering from unemployment - we'll get the same buoyancy in the housing market,” he said.

At a 9-10% drop, households in New Zealand would be “generally OK in terms of net equity...most households have got 20% equity or more in their houses,” Bascand added.

On the Covid-19 recovery, Bascand said a large challenge was New Zealand's reliance on trading with nations that are still battling the virus. “We're dependent on trade with China, with Europe, with the states (US). If we can open up with Australia and potentially some others, that'll be wonderful, but we think we've still got some months ahead of economic pain, but not as much as it might have been.”