At the same time, house prices are now picked to fall by more than a quarter off the peak.
A family who bought a $1 million house at the peak with a $250,000 deposit will lose all their savings and have to pay three times as much interest on the $750,000 they borrowed.
At the very least, that will hit business by slashing consumer spending. For small family businesses secured by home loans, it will be difficult to meet the payroll, let alone hire or invest. In the worst case, the bank will foreclose and sell the home.
The tripling of interest payments also assumes the government and bank economists who were so wrong about this month's inflation data are right that this time it has peaked.
Everyone agrees borrowers will be walloped with two big interest rate rises in November and February but some think that will be the end.
In fact, there's no real reason to be so sanguine.
Inflation is now endemic in the New Zealand domestic economy and employees and their unions will rightly demand at least 7 per cent pay rises just to stand still.
But 7 per cent is just the start.
The labour market remains tight. The outward border is wide open but the inward gate is still mostly shut. Twenty-somethings are ready to take off for their much-delayed OEs and the economic outlook in Australia looks better than over here. Even as they face falling revenue, businesses will remain desperate for staff.
Most workers will therefore have a good case to demand double figures and their employers not much choice but to pay up or close up shop.
And so, as everyone should have seen way back in early 2020 and some did, the inflation spiral will worsen with interest rates risking going even higher than the latest predictions.
That in turn will further depress the property market but support the kiwi dollar, ending exporters' and tourism operators' current favourable trading conditions.
At the same time, we remain dangerously dependent on China for exports, imports, tourists and — once the industry relaunches — international students, at a time when it marches ever faster towards authoritarianism and expansionism.
Former Prime Minister and current ANZ New Zealand chairman Sir John Key is still relaxed about heaping praise through China's state-controlled media on its Communist Party and President-for-Life Xi Jinping, but greater caution is increasingly called for.
China did not make New Zealand its best little friend in the west a generation ago out of benevolence, but to infiltrate, influence and undermine the Five Eyes intelligence alliance through its smallest, weakest and most naive member.
We are now stuck. If Xi has no qualms about calling in the foreign media to his party congress to witness the ritual humiliation and disappearance of his predecessor Hu Jintao, we should be under no illusion about what he would do to our economic and security interests should we step out of line.
There is evidence China successfully placed spies into our two main political parties.
MFAT officials have growing concerns about other Chinese agents of influence in New Zealand. China is not our friend because its people like milk powder and bungy jumping.
Meanwhile, the return of Trumpism looms in the US, ultimately our only true security guarantor either directly or through Australia, our sole remaining military ally.
Tuesday week's US mid-term elections are expected to see Donald Trump-backed Republicans take control of both the Senate and House of Representatives, rendering President Joe Biden ineffective.
Presidents being humiliated in the mid-terms two years after their election is not uncommon. It happened to Bill Clinton, and to a lesser extent to Ronald Reagan, Barack Obama and Trump.
But Biden is no Clinton, Reagan, Obama or even Trump. His candidacy in 2024 is surely unviable on health grounds and his Vice President, Kamala Harris, has joined George H.W. Bush's Dan Quayle as a national joke.
Unless a new credible Democratic alternative emerges, Trump's comeback appears locked in.
Xi, Trump 2.0 and Vladimir Putin controlling the three superpowers would surely be the end of the multilateral rules and institutions that have kept the peace, albeit imperfectly, since 1945.
The immediate economic risks to New Zealand are stark enough. Add in the medium-term risks and the images of the Prime Minister playing in the snow on what can only be considered a jolly represent a serious political miscalculation.
The next election should be a watershed moment in New Zealand history. Like 1935, 1972, 1984 and 1990, serious decisions about economic and foreign policy need to be made.
New Zealanders might hope that the most likely incoming government, National, would be working hard to be ready to be as transformational as those led by Michael Joseph Savage and Peter Fraser, Norman Kirk and Hugh Watt, David Lange and Roger Douglas or Jim Bolger and Ruth Richardson — or even, in their own way, Helen Clark and Michael Cullen.
Instead, National appears stuck in the Key-Ardern rut of caring solely about winning office with no commitment to serious thought and careful planning about what it might want to do with the power that potentially comes with it.
Ardern's Government having no idea what to do except generate photo ops is fully priced in. But it is increasingly clear that Christopher Luxon's National looks set to be much less Margaret Thatcher and much more Liz Truss.
- Matthew Hooton is currently interim head of policy and communications for incoming Auckland mayor Wayne Brown's office. These views are his own.
