Watch: Finance Minister Grant Robertson told the Epidemic Response Committee he predicts a 'quantum economic shock' greater than GFC due to COVID-19. Credit: Video - Newshub; Image - Getty

House prices are being tipped to plummet more than 10 percent thanks to COVID-19. The prediction - chilling for homeowners, a silver lining of the pandemic for others - comes from economics researcher Infometrics. Forecaster Gareth Kiernan says the lockdown will be followed by months, if not years, of negative and slow growth. Many will lose their jobs, and anyone looking to sell a house will struggle to find a buyer.

He told Newshub house prices will hold steady for now, but by the end of 2021, they'll be down 11 percent. "In the first instance, homeowners are probably not going to be particularly affected partly because the Government's got the mortgage holiday scheme in place. And so for the next five or six months, that's going to limit the number of people who are going to be potentially forced to sell their house because they might have lost one or both of their incomes with the downturn that's occurring. "But following on from that, over the next year or so, we are expecting house prices to be pulled downwards because with the rising unemployment and jobless numbers, there are not going to be a great deal of buyers in the market. There will be people who are under increasing financial stress and forced to sell their house - and so we are expecting to see house prices to drop by over 10 percent by the end of next year." But even if you still have an income and savings by the end of next year, don't expect houses to suddenly become affordable. The median price nationwide in March, according to REINZ, was $665,000 - 11 percent off that brings it down to $591,000, which was the median price in September last year. The median house price has risen 70 percent since 2013.

Infometrics is also forecasting unemployment to hover around 9 percent through 2021, the highest it's been since the early 1990s. "It could well be higher than that," said Kiernan. "Businesses aren't going to be going out and hiring anytime soon. The wage subsidy can only remain in place for so long. We may see some extension of that after 12 weeks for some of the most heavily affected areas of the economy, such as hospitality. "But... they operate on very thin margins anyway, so the viability of many of those businesses may be pretty difficult over the minimum term." Areas that rely on tourism will also be hard-hit, with international travellers likely to be thin on the ground, even when the total ban is lifted, particularly if quarantine measures are kept while the virus remains in transmission overseas. "If you're having to do that for two weeks, there's not much point coming here for a holiday." Infometrics estimates having zero international tourism will knock 5.2 percent off GDP alone, and domestic tourism - even if Kiwis spent what they normally do on overseas trips - won't even make up for half of that. The good news is the Government has a "once-in-a-lifetime opportunity to reshape our economy and workforce and rectify some of the imbalances that have arisen" in the past, Kiernan says. "Opportunities for the Government include the capacity to substantially expand the state housing stock, address the infrastructure shortfall of previous years, and provide backing for new businesses in regions that have been hit hardest by the collapse of tourism. "It's clear that the New Zealand economy faces its toughest challenge in nearly a century, with widespread job losses, business closures, falling house prices, and poorer households. To get the economy through this economic chaos, New Zealand needs a bold response from the Government."