The world’s frothiest housing market is getting a reality check — and it may be a harbinger for the rest of the world. Once at the forefront of the pandemic property boom, New Zealand saw median home prices plunge 8% in June — after annual gains of nearly 30% in 2021 — and transactions plummet almost 40%. Economists think there’s more room to fall further, as much as 20% from the late 2021 peak.

“It’s not unreasonable to look to New Zealand as the canary in the coal mine,” said Sharon Zollner, ANZ Bank’s New Zealand chief economist. “Interest rates have been rising here for about a year now, which does put us well ahead of the pack. The themes we are seeing here are very similar to what’s happening in the US and Australia.”