Reserve Bank governor Adrian Orr was grilled by MPs today, telling them to “take a step back and just breathe” when it comes to inflation.

He told MPs house prices should drop 5 to 20 percent from current levels to be sustainable.

Orr was asked about recent homebuyers who may then face negative equity or stress from higher interest rates, and said the bank had warned them.

Property Council chief executive Leonie Freeman joined Heather du Plessis-Allan.

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