The financiers who made a fortune betting against the American housing market in the new Wall Street blockbuster The Big Short would take a punt against Auckland's if they could, says one local fund manager.
The film - which earned a Oscar nomination for Best Picture on Thursday - stars Christian Bale as Michael Burry, the hedge fund manager who predicted what few did - the American sub-prime mortgage crisis that triggered the credit crunch and the meltdown of the US economy.
Burry put his investors' money where his mouth was and in 2005 bet more than a billion dollars that the US housing market would fail.
When it all came crashing down, he made huge returns when others were losing everything.
Despite numerous comedic moments, The Big Short is didactic - and finishes with a warning that some of the complex financial instruments that contributed to the global financial crisis (GFC) are now back on sale.
These products - designed in Wall Street - never achieved popularity in the New Zealand market before the GFC and haven't since.
However, local commentators say a year like 2008 could happen again and that risky investor behaviour is making a comeback.
While believing it was fair to condemn bankers, rating agencies and some of the "abhorrent" business practices that led to the GFC, Craigs Investment Partners' Mark Lister says that investors were not completely blameless.
"Many were too greedy, too complacent and got too accustomed to the big returns of the preceding few years to question whether it was all sustainable," Lister says.
"Even here in New Zealand, we saw unrealistic expectations drive behaviour in the lead up to the GFC. People demanded higher returns, so were tempted into finance companies offering slightly higher interest rates. Shares and property were booming, so many ignored diversification principles and piled in with borrowed money," he says.
But what worries Lister the most is that "risk-taking behaviour has crept back into the mind-set of some investors".
Some have relaxed their standards in terms of fixed interest credit quality to get better returns, others have abandoned fixed interest altogether for shares in the search for yield, and plenty are assuming that capital gains from houses continue forever.
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One of The Big Short's salient points is that the unwavering belief that property prices will keep on rising can end disastrously for an entire economy.
Castle Point Funds Management's Stephen Bennie reckons the guys in the film would be "mad keen to short the Auckland residential market" if they could.
"Some of the stories that are coming to the press are real peak of the market chatter," Bennie says.
The fund manager brings up the example of Auckland first home buyer Ollie Wall, who told the Herald this week that he wasn't worried about having to borrow $520,000 to pay for his Freemans Park apartment.
"It wasn't that his mortgage was a whopping $500k plus that was scary," Bennie says.
"No, the doozy was his advice was to not worry about the cost of Auckland housing but to 'just take the leap'. This don't worry the market will always go up [belief] is classic bubble behaviour," he says.
Bennie, who ran a defensive Australasian equity fund during the GFC, said one of the big lessons from the crisis was that investors need to understand what they own.
"Don't rely on bankers, brokers or, god forbid, credit ratings agencies. Do your own research, know what you own," he says.
Professional director Rob Campbell, remembering the last decade, says "roving bands of investment bankers" made their way to this country and often seemed to share his lack of understanding in the complex financial products they were selling.
The nature of investment banking has not changed and they would still sell an option on their mother's grave site if allowed and there were a receptive market.
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While he believed the GFC influenced investors' appetite for risk in this country, it didn't cure greed.
"[It] may only have shifted its malevolent attention back to housing. Market memory fades very quickly."
Milford Asset Management executive director Brian Gaynor says while there was activity in overseas markets similar to what was seen before the GFC, it wasn't happening in this part of the world.
"I could be proved wrong but I don't think we see it in New Zealand or even in Australia," Gaynor says.
"I think we are seeing some of this activity in emerging markets in countries like Brazil and Turkey and we're going to hear probably a lot of bad news about those countries in the future."
A big difference between the pre-GFC era and today was the level of regulation in New Zealand.
"We went from a Securities Commission which had about 15 people to a Financial Markets Authority which had 175. It's change the game completely in the investment world," he says.
However, Gaynor says one thing that hasn't changed is investors' taste for risk-taking.
"Risk is always there, I keep on seeing people continuing to want to do things they can't afford."