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22-07-2016, 01:06 PM
#10671
Originally Posted by Daytr
I get your logic FP, but its only one factor.
Particularly when you have record immigration and many of the new buyers are not impacted by domestic interest rates or global rates for that matter.
Comparing to history can be a dangerous thing, as in this case affordability needs to be taken into account.
What was the average wage multiple to the average house price then, compared to now for instance?
The thing to consider is what was the cost of ownership - not the capital cost. The cost of borrowing has a huge influence. Sure, it takes longer to earn the price of a house - that's worldwide. But the price of the mortgage has not increase by the same multiple. If you go back far enough you could have had a free cave. And yes, immigration plays a part, but also keeps us afloat with workers.
Solve the problem of 32000 vacant houses in Auckland, and that sorts accommodation shortage out. Surely the owners of these properties realise that tenants are an effective way of keeping the burglars out.
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22-07-2016, 05:05 PM
#10672
Originally Posted by fungus pudding
..... Solve the problem of 32000 vacant houses in Auckland, and that sorts accommodation shortage out. Surely the owners of these properties realise that tenants are an effective way of keeping the burglars out.
Is it a problem though? Pretty much everyone lives somewhere and can improve their living arrangements with time and good money management. 'Twas ever thus. And for those that can't, don't, won't, well they are unlikely to be top of most landlords list. (Every year tens of thousands of tenants are taken to the Tenancy Tribunal mostly for rent arrears or damage. Add those with a poor credit record and that is a truckload of potentially unsatisfactory tenants.)
Several commenters have made the point in the media that many of those houses are empty for good reasons, as the census data measures houses empty on the night. As for those empty to avoid tenant hassles, can't blame them really. Burglars might be preferable!
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23-07-2016, 08:09 AM
#10673
For a long time & pre oil crisis interest rates were actually relatively low and affordability was around double the average annual wage.
Affordability has skyrocketed under national by multiples so that again blows your argument out of the water.
Basically home loan rates have dropped by 3% in the last 4-5 years, meanwhile housing in Auckland is up by around 80%.
Just for a little bit of perspective FP.
Originally Posted by fungus pudding
The thing to consider is what was the cost of ownership - not the capital cost. The cost of borrowing has a huge influence. Sure, it takes longer to earn the price of a house - that's worldwide. But the price of the mortgage has not increase by the same multiple. If you go back far enough you could have had a free cave. And yes, immigration plays a part, but also keeps us afloat with workers.
Solve the problem of 32000 vacant houses in Auckland, and that sorts accommodation shortage out. Surely the owners of these properties realise that tenants are an effective way of keeping the burglars out.
Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.
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23-07-2016, 09:15 AM
#10674
Originally Posted by Daytr
For a long time & pre oil crisis interest rates were actually relatively low and affordability was around double the average annual wage.
Affordability has skyrocketed under national by multiples so that again blows your argument out of the water.
Basically home loan rates have dropped by 3% in the last 4-5 years, meanwhile housing in Auckland is up by around 80%.
Just for a little bit of perspective FP.
Interest rates have dropped from 10 or more% to around 5-6 % that's around 40% drop in the last decade. If you can't see a link between interest and RE prices you're not looking. If interest rates shot back up to say 15% do you really think RE would not be hit? Same with the sharemarket of course.
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23-07-2016, 09:21 AM
#10675
We can all pick a point in time FP.
I didn't say there wasn't a link, I'm an ex banker for gawd's sake, in fact previously I said there is a relationship, however there are many other factors and at the moment house price appreciation is far and away outstripping any offsetting interest rate savings.
Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.
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23-07-2016, 09:22 AM
#10676
Originally Posted by Daytr
Basically home loan rates have dropped by 3% in the last 4-5 years, meanwhile housing in Auckland is up by around 80%.
.
Its data manipulation like this example (we all do it, so I am not picking on you Daytr, its just that yours is the latest example) that for mine detract from the argument because its too easy to see through and then the reader feels they are being manipulated. We all know home loan rates have not fallen by 3% but more like by 37.5% but technically the writer is correct in that rates have come down from 8% to 5% (a 3% drop) however that is a fall of 37.5%. (8-5)/8
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23-07-2016, 09:54 AM
#10677
Originally Posted by Daytr
We can all pick a point in time FP.
I didn't say there wasn't a link, I'm an ex banker for gawd's sake, in fact previously I said there is a relationship, however there are many other factors and at the moment house price appreciation is far and away outstripping any offsetting interest rate savings.
No doubt. But it's a bit tiring to continually hear how much prices have risen, without a single nod to affordability, which is a huge factor.
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23-07-2016, 06:20 PM
#10678
Blackcap its nothing of the sort, it was obvious what I was conveying. And the 37.5% or whatever it is of 7-8% that rates were makes it sound a lot better than it is. If rates were 2% and went to 1% they would have reduced 50%....
Housing affordability is measured around the world by multiples of the average wage and that has blown out particularly in Auckland but also on average across NZ.
Originally Posted by blackcap
Its data manipulation like this example (we all do it, so I am not picking on you Daytr, its just that yours is the latest example) that for mine detract from the argument because its too easy to see through and then the reader feels they are being manipulated. We all know home loan rates have not fallen by 3% but more like by 37.5% but technically the writer is correct in that rates have come down from 8% to 5% (a 3% drop) however that is a fall of 37.5%. (8-5)/8
Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.
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24-07-2016, 09:23 AM
#10679
EZ - here's an interesting paper. Would Labour strategists dare read such stuff
Trump, Brexit, and the rise of Populism: Economic have-nots and cultural backlash
Ronald F. Inglehart and Pippa Norris
https://www.dropbox.com/s/aufvq80d5y...-2016.pdf?dl=0
NZ is ripe for a 'populist' to make a decent showing in 2020 elections. . If somebody does step up i think Labour would be the losers.
Last edited by winner69; 24-07-2016 at 09:25 AM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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25-07-2016, 04:36 PM
#10680
Watched Grant Robertson on Q&A yesterday taking about the economy and other things
Seems to know what's wrong but didn't come across having any ideas how Labour going to fix things
Labour still don't have a narrative and its just over a year away from the election. Of they do i must be rather thick because as hard as I try i just don't get it.
Can't see them doing that well next year - pity really as the Nats are ripe for the taking.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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