Brace yourself and imagine Auckland house prices falling 55 per cent. Former Reserve Bank Chairman Arthur Grimes proposed deliberately making the Auckland housing market crash 40 per cent by building 150,000 houses over six years to make housing more affordable.
Former Reserve Bank Governor Don Brash then said Auckland house prices needed to drop 60 per cent to achieve affordability.
The Prime Minister immediately wrote off the idea of a large fall in Auckland as "crazy" because of the effect on developers, banks and the wider economy, which attempted to kill the debate stone dead.
Everyone seemed to accept a fall of that magnitude would be a catastrophic, economy killing event that could not be contemplated, let alone studied or debated.
Surely, everyone thought, it would cause a crisis similar to the ones that broke the banks and forced taxpayer bailouts in the likes of the United States and Ireland?
Politicians of all colours and lobbyists for landlords may talk about housing like some sort of bomb under the economy that cannot be dismantled, but would such a fall kill the economy, and the banks for that matter?
Luckily for us, we don't have to imagine. The Reserve Bank has done a test of just such an scenario, and quite recently.
It ran a "stress" test with banks late last year to see what would happen to their balance sheets if house prices fell 55 per cent in Auckland and by 40 per cent nationwide.
It found the world would not end. Banks would not force everyone to sell their houses. Most home-owners have vast amounts of equity to fall back on. Those in negative equity would neither send their keys back to the bank in the mail nor be turfed out without warning.
The incentives for borrowers and banks in New Zealand are quite different to those in the US or Ireland.
New Zealand's banks are well capitalised and have not sliced and diced and sold off their mortgages into hyper-financialised markets primed to blow up "Big Short"-style.
They now mostly rely on stable long-haul and local term deposits for funds. They are also very profitable and the Reserve Bank found the losses from such a big fall in house prices would eat into those profits and ultimately reduce their capital buffers from around 10.3 per cent to 8 per cent.
Yes, a few highly leveraged rental property investors might lose some equity. But isn't that one of the risks of doing business?
But that is far from being bust. At the very worst, the Reserve Bank said it might have to stop some of them paying dividends to their parents in Australia.
That is far from catastrophic.
It's worth noting the Reserve Bank did not muck around with a simple scenario. It also assumed the fall in Auckland house prices would happen at the same time as a rise in unemployment from 5 per cent to 13 per cent and a recession that carved 6 per cent off GDP.
Just for good measure, it also assumed that dairy incomes remained at their current unprofitable levels and that banks would also make losses on their business and commercial property loans. It found losses on mortgages would only be around 1 per cent of the bank's mortgage books.
It's worth remembering the bulk of borrowers are having few problems servicing their debt at current interest rates. Reserve Bank figures show total interest costs are around 9 per cent of household disposable income, which is down from a 2008 peak of 14 per cent, and similar to levels seen in 2003.
Plenty of buffers are built into the system in terms of bank capital, interest-servicing costs and home equity, except for those at the most extreme end, and the Reserve Bank pointed out interest rates would fall in such a scenario, too.
There are also fewer borrowers up to their gills in debt because the Reserve Bank has deliberately and successfully forced banks to reduce loan to value ratios over the past three years.
Yes, a few property developers might see projects fall over, although there are a lot less of them leveraged through finance companies than before 2008. Yes, a few highly leveraged rental property investors might lose some equity.
But isn't that one of the risks of doing business?
Why are politicians of all colours so afraid? And whose interests are they protecting when they say such falls are "crazy"?