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George
23-07-2006, 10:49 AM
Reading Olly Newland's book (2003) about the coming crash. He stated that some of the signs were:
More for rent signs and ads
More properties with prices rather than Tender or Auction
More incentives such as cars, trips etc. when signing up for a new house
More ads by get rich quick promoters
Unexpected interest rate rise
Serious political crisis
Median property prices falling 3 months in a row
A sharemarket break or major company collapse
Tax changes that tax speculation

The bottom is close when:
Several medium-large companies collapse
Many mortgagee sales in middle-upper class areas
Increase in offers of vendor finance, interest free loans etc.
Horror stories about those who've lost life savings

At our local supermarket in West Auckland there were a couple of guys in black promoting no-commission property sales, two different guys (again in black) were there several weeks ago - is that another sign?

My girlfriend wants to buy a house at Xmas (about $80,000 down on a 250-300 grand property) but I'm concerned that we will be buying at the top and if there is to be a downturn, a wait of 2 or 3 years would be more profitable. Also, at 50 plus, we can't afford a mistake.

Do any posters here observe any of the above signs occurring at the moment or have other comments.
Cheers
George

George
27-07-2006, 07:26 AM
Perhaps the lack of interest in the property forum is another sign!!!

Halebop
27-07-2006, 09:53 AM
Maybe nobody wants to start an argument :D

The economy looks to have peaked although a cold winter might mask a retail soft spot. Petrol is still the wild card for me and may yet go higher. While activity in Auckland's property market has been soft I think we haven't seen anything we can emphatically call falls yet*. Rising wage claims on a softer economy spells falling productivity, which was the precurser to the property slumps in the late 80s and mid 90s. Productivity is an under reported barometer in this country but is key to both sides of the economic divide: wealth creation and the tax base.

Olly Newland might know a bit about the property market but his insights into other areas of the economy can be "interesting". I think he carries a bit too much baggage from Landmark Corporation.

* ...but don't trust the REINZ numbers, they report what is selling, not what average property values are. What is "selling" could just as easily be a subset of rising value, "in demand" real estate in an otherwise generally falling market. It's a w@nky measure and I'm not sure why it occupies so much head-space.

George
27-07-2006, 08:21 PM
Re Newlands "the bottom is close when there are many mortgagee sales in mid-upper class areas".
The latest Listener on page 18 says "The evidence is there in the rise in mortgagee sales, ads for which have recently been filling whole pages of the Heralds property pullout. Paul Humphries of Barfoot and Thompson confirms that it's happening more at the top end of the market too - the only good news is increased immigration of nearly 11,000 in the past year has held prices up so far".
How can a bottom be close when we haven't had any noticeable fall yet???
The Listener piece was related to "a retail addiction that is just crippling people, especially those on middle incomes and above". The article "Desperate Homeowners" was about how the increases in petrol, energy, rates etc. are squeezing many people and may influence them re any property purchases.
Today in the Herald the cost of water also is to rise.

Cooper
30-07-2006, 04:31 PM
So when it comes to property crashes, you're curious, george?

See what I did there? Eh?

It's a good question but hard to answer. Newlands draws from past experience but to some extent the current level of property prices may or may not be reliant upon the amount of excess liquidity floating around. Add to that the exciting battle of inflation vs reserve banks worldwide and it gets harder to answer.

I know the Economist has been arguing that there are bubbles in the property market on the basis of property values being reliant on 1) An individual's income (to purchase the property and finance debt) and 2) Yields, which are reliant to some extent on an individual's income. By those measures (affordability and real income), there should be a plateau or a drop in values. The argument is logical.

But at the same time there may have been a shift in the perceived value of property. Such a change in perceived value might provide a strong basis for continued relative strength in the property market as people's willingness to pay for a set unit of property increases. If everyone thinks that property is going to remain at a similar relative level, then it will, and affordability can go hang.

But even if there is a property value correction it may be realised through a number of different avenues. Sharp correction or long plateau in a relatively high inflation environment? Don't know.

Cooper
30-07-2006, 04:50 PM
Also, it should be noted that there appears to be greater demand for "entry level" housing than there does for higher cost houses. As household affordability decreases, lower-end property values get driven up. As Halebop mentions, the figures may be misleading in regards to the state of the market. There may actually be more than one market: Low priced houses and other houses, with the lower priced ones bid above their long term relative value.

My fiance and I are looking to upgrade to a larger house, so we're having a look around at the moment as well George. I've given it some thought and I honestly can't say whether my decision to buy would be affected by current market conditions or not, but as we'd be simultaneously selling into the same market conditions (actually into different market conditions, possibly, if paragraph one is correct) we are "hedged" to a certain extent.

I wrote a long, convoluted email to a friend after they asked me whether I thought they should buy, and if you compare current rent prices to interest payments on a strictly monetary basis then renting currently seems to me the best option. I guess it depends on how much value you or your girlfriend would place on home ownership. I advised he wait until he had more of a deposit and because of market uncertainty, but that was advise from a friend to a friend (he can always give me a belt if I get it wrong). Good luck for whatever you decide, regardless.

corwen
06-08-2006, 09:32 AM
All I know is that the usual cycle is around 8 years.
Thus, must be close to peaking. The US market is dropping,
we usually follow yhem. Take your pick.
I wouldn't want to buy at present prices in some areas.

da player
06-08-2006, 07:46 PM
a different point of view.or 2

i have just come back from overseas and can definately say that from a global perspective NZ is CHEAP.....

however i am a homeowner here 75% equity in an average North Shore home and i am considering selling...working overseas - bankking the money in the possiblbe event of a 20% drop in prices....

my house is not a home it is an investment---any thoughts on doing that???

trackers
12-08-2006, 04:40 PM
quote:Originally posted by cantab

NO


Well said.

trackers
12-08-2006, 04:42 PM
quote:Originally posted by da player

a different point of view.or 2

i have just come back from overseas and can definately say that from a global perspective NZ is CHEAP.....

however i am a homeowner here 75% equity in an average North Shore home and i am considering selling...working overseas - bankking the money in the possiblbe event of a 20% drop in prices....

my house is not a home it is an investment---any thoughts on doing that???


Hmm.. I don't think prices are going to go down, I think the very low (even taking into account that they've pushed the bar back on this) unemployment should push up wages to the point where the earnings multiple to buy a house isnt so bad; I do believe we're in for 1/2 years of stagnation until wages move higher and/or interest rates drop to a more encouraging level. I could more see the validity of your idea if you said bank the money in the case that house prices go down significantly and/or interest rates go down significantly - but hey thats just me

R2
12-08-2006, 05:08 PM
da Player, if you are going to work overseas for 3 years or longer. One idea to consider is to sell your house. Buy another with minimum deposit and bank the remainder of your equity. Register for a non-resident AIL exemption.

That way you'll clear over 7% on a bank term deposit (currently), have carry-forward tax losses from the property you're renting out to offset earnings when you repatriate and have a hedge against property increases which will hopefully be the case.

I agree with Trackers - flat for a year and then away again. Whenever there are drops in price they bounce back in a couple of years anyhow.

bigbear
14-08-2006, 08:30 AM
I do not have much experience in the residential property market (other than my own house).

What I observe is that this market is driven my emotion more so than most (although all are to a certain extent). Can not imagine people accepting a loss on houses unless it is forced upon them (ie reloaction, bank etc). People will tend to sit and wait, so long as you can pay the mortgage then any loss is 'on paper'.

Higher interest rates as fixed interest loans expire will hurt and I imagine at least 1.5% is being added to the interest cost as these loans roll over. I fail to understand people buying rental houses at a 4% yield, this is a capital gain play that has probably worked well in recent years but leveraging an investment at half the cost of bank funding will never appeal to me. You are forced to top up deficit from other sources of income (assuming largely debt funded which most seem to be).

Like others here I do not belive there will be a crash as people have an emotional attachment to there house assets and simply will not accept a loss. Maybe they will take longer to sell and in some areas that is happening already. Housing is an illiquid asset so if you have to get out fast then losses are possible.

coge
14-08-2006, 08:59 AM
No crash. There is no reason for one. Low unemployment & interest rates etc. The only problem would be when Provincial finance type outfits start offering housing finance to the non credit worthy. Even then it would only effect the bottom end. All that said it still pays to buy smart.

As far as rental yields being low, they will catch up in due course. There are tens of thousands of individual landlords in NZ, hence inefficiencies with rent rises. I.E they don't all put rents up at the same time. This fact will not cause a crash either.

Halebop
14-08-2006, 07:10 PM
Last time I looked interest rates were nudging towards double digits. Can $30,000 in interest payments on a $350,000 Auckland house be considered "low"? This is over half the national average take home income for couples.

While it may seem compelling to think people will not sell into a slump we haven't yet experienced a market where more investors (including lenders) are more concerned with capital preservation than capital growth. With 1/3rd of housing stock owned by investors it only requires the banks say so to sell, as many "well financed" investors discovered post 1987.

This boom is fed by a combination of financing, demographics and hype. I'm yet to see any of these factors defy gravity forever. 50 year mortgages on Campbell? If the difference between boom and slump is finding more punters by "saving" them $200 a month then $200 is a pretty fine margin to fund the house of cards. A correction sooner rather than later would be healthier for everyone.

bigbear
14-08-2006, 07:34 PM
Good points Halebop, sales could be forced by the bankers. If that happened then very quickly the correction could be ugly. I tend to agree any correction would be better sooner rather than later.

In your $350k example I would guess the weekly rental might be $350 which is $18,200 pa. There is a significant short fall in meeting the interest bill (assuming 100% debt funded) before you have meet the rates, insurance and R&M. This will hurt very quickly if you lose confidence (or your bank does) in the certainty of your other income sources, which are very necessary in this example, or capital growth.

I think one thing NZ'ers are going to have to accept is that only a realtively small portion of us (say 1/3 maybe 50% at most) are realistically going to be able to afford a house of their own. A lot of people seem to be prepared to commit to enormous mortgages which leave stuff all wiggle room when something goes wrong. I have always seen the house as a lifestyle asset as it provides me with stability as no one can kick me out. Perhaps what needs to develop in NZ is longer term residential leases to give certainty of tenure to both sides. At the same time the NZ investment culture would need to change so people could invest in equities both domestically and internationally as a way of increasing their invested wealth. I am however a realist and expect that this is a situation NZ as a whole will not accept for some time.

Just before you think I am anti property I most certainly am not. Commerical property is where I have my most significant investments so my comments with respect to residential should be seen as those of a layman not an expert.

The Doctor
15-08-2006, 06:24 PM
the Sydney property market has been 'robust' for a decade...7yrs of straight cap gain and then a stabilising, but not a crash.

Enumerate
17-08-2006, 02:13 PM
Three key factors need to change before a crash:

- Monetary policy is, in effect, loose. Inflation is running at about 4%. Mortgage rates at about 8% - its only a 4% margin. First sign of a tightening of monetary policy that will control inflation is evidence that the government is controlling inflation. Like that will happen anytime soon.

- Immigration would have to turn negative. Not likely in the short term.

- Unemployment would have to rise to a significant historical level. Not likely in the short/medium term.

Even if all three happen - a crash is only likely as a consequence of a bubble boom in prices. There is no evidence that price activity over the last 5 years is a bubble.

Having said this - holding property with high gearing for investment purposes is likely not to be a good idea over the short to medium term.

Longtack
18-08-2006, 04:12 PM
I'm a nay-sayer.
A little growth for a couple of years then a rise - situation-normal over the long term.
The rental market c/w the buy-your-own is increasing.
"After 9" Chris Laidlaw, Nat'l Radio 101.7FM this sunday on this topic.
As the "Kiwi dream" becomes more ellusive/illusive rental property will become more attractive to investors. Some over-extended newbie punters will fall by the wayside and the banks will suggest cashing-up and cheerfully taking a profit.(That's my uninformed ob'.)

Here are the stats - REINZ self-interest but worth a look.
http://www.reinz.org.nz/reportingapp/default.aspx?RFOPTION=Report&RFCODE=R100

JBmurc
18-08-2006, 04:51 PM
[quote]Originally posted by Enumerate

Three key factors need to change before a crash:

- Monetary policy is, in effect, loose. Inflation is running at about 4%. Mortgage rates at about 8% - its only a 4% margin. First sign of a tightening of monetary policy that will control inflation is evidence that the government is controlling inflation. Like that will happen anytime soon.

- Immigration would have to turn negative. Not likely in the short term.

- Unemployment would have to rise to a significant historical level. Not likely in the short/medium term.

Even if all three happen - a crash is only likely as a consequence of a bubble boom in prices. There is no evidence that price activity over the last 5 years is a bubble.

Having said this - holding property with high gearing for investment purposes is likely not to be a good idea over the short to medium term.

;)I agree with your points, and as of locally(Queenstown)I belive its a great time to buy property with many homes well under replacment cost ,And IMHO (built 4 homes here now)as long as sections prices don,t fall alot, inflation is running at 4% so cost to build is only getting alot more expensive
I know off one prime property that was advertised at 2,000,000 last year and as of the lastest property press is still for sale but for [xx(] $799,000 [xx(] going have to check it out;)

Longtack
19-08-2006, 03:37 PM
15 Portree Drive Quail Rise JBMurc???

JBmurc
20-08-2006, 08:48 PM
No Queenstown hill will post asap on the home 1.2mill dropped has me curious ;)

trackers
21-08-2006, 06:48 AM
Maybe its leaky? :)

srotherh
21-08-2006, 06:37 PM
Dont we follow the Assies?

http://www.smh.com.au/articles/2006/08/20/1156012414995.html?from=top5

trackers
22-08-2006, 12:25 PM
quote:Originally posted by srotherh

Dont we follow the Assies?

http://www.smh.com.au/articles/2006/08/20/1156012414995.html?from=top5


Ouch...

A fairly extreme example, but still kinda scary!

Get Real
06-09-2006, 11:06 AM
more bad news from sydney! It's going to be a blood bath.

http://www.jenman.com.au/NewsNews1.php?id=370

http://www.jenman.com.au/NewsNews1.php?id=308

Pennywise
06-09-2006, 12:56 PM
Want proof? Try this. A home sells for $300,000. The owners spend $100,000 on renovations and then sell the home for $400,000. “Prices soar by 33 per cent,” says one set of statistics.

When you consider that Australians spend around $17 billion a year on home improvements – and that the cost of these improvements are not counted in the statistics – you get some idea of what is meant by “dangerous”.



good read, thanks.

have been saying this for years on house "stats"

Jess9
09-09-2006, 09:58 AM
Its already started, smart buyers know, vendors will soon...

rmbbrave
09-09-2006, 10:56 AM
Business
Lowering the boom on construction

Saturday September 9, 2006
By Anne Gibson


The construction boom appears to be over, with figures out yesterday showing a rapid downturn in the sector.

Statistics NZ said the value of building work for the June quarter was down 9.1 per cent on the March quarter on a seasonally adjusted basis, following a 3.6 per cent rise.

In the June quarter building work was worth $3.1 billion, down on the $3.3 billion in the March quarter. House building is slowing down most.

Registered Master Builders Federation chief executive Pieter Burghout said the figure could mean the sector would make inroads into the $100 million backlog of house additions and alterations that had accumulated during the building boom.

Builders who had one to two years' worth of work lined up now had six months to a year's worth of work. "It takes workloads to a manageable level," he said.

Statistics NZ said the construction sector finished work worth $12.6 billion in the June year, up 5.8 per cent, or $695 million, on the work completed in the previous year.

Goldman Sachs JBWere economist Shamubeel Eaqub said residential construction plunged by 10.3 per cent in the June quarter, suggesting the long-awaited slowdown was finally gathering pace.

Non-residential building activity (office blocks, hotels, factories, hospitals and schools) fell 5.5 per cent from the March to the June quarters.

"The level of activity in the sector still remains very high by historical comparison," Eaqub said.

"This is consistent with our assessment that the economic downswing is gathering pace.

"The Reserve Bank will be pleased to see the slowdown in house building, which has been a major source of inflationary pressure.

"While this has no immediate implications for monetary policy, we believe accumulating evidence of a slowing economy will be pivotal in shifting the Reserve Bank's focus from inflation to growth," Eaqub said.

The figures appear at odds with data released last week showing that building consents hit a record level in July.

However, those figures related only to the intention to build - while yesterday's data showed work actually begun.

Alan Wilkins, an analyst at Winstone Wallboards, said his firm's wall and ceiling product sales had been gradually declining since early last year.

Statistics NZ gathers the data on building authorisations which comes mainly from builders and property owners.

Going down

House building is slowing down fast.

Builders have less work but there is still a backlog.

Demand for building products is declining.

Auckland house prices have dropped.

The Doctor
09-09-2006, 06:35 PM
there are allready more sellers than buyers in the market and about to get worse.

rmbbrave
10-09-2006, 09:22 AM
Bank on mortgage misery
10 September 2006

By ROD ORAM
Recent rapid economic growth has wrought some spectacular economic changes. One of the more arresting examples, is the mortgage market but its lending binge is about to create a lot of grief.


Mortgage lending has been a driver and beneficiary of the longest boom in more than 30 years. Since 1999, the economy has grown about 30%, fuelling brisk job creation and rising wages. And consumers have borrowed big time to fund property and consumer goods purchases.

The nation's mortgage book grew by 133% from $52b in January 1999 to $121b this July as the lenders fell over themselves to satisfy borrowers. The flood of money pushed house prices and consumer spending to unsustainable highs. Their annual rates of growth peaked last year at 25% and 20% respectively, contributing powerfully to inflation.

The buoyant conditions have stimulated three major changes in the market. The first is the dramatic shift from floating rate to fixed-rate mortgages. The split between them has swung from 36% floating vs 63% fixed in January 1999 to 16% / 83% this July.

Two factors have emerged as increased borrowings drove up households' ratio of net debt to disposable income. We now have the second highest household indebtedness rate in the OECD with only Australians in deeper hock.

Consumers wanted certainty about mortgage payments so they could budget for their high borrowing costs. The lenders obliged with the switch from floating to fixed-rate mortgages. And because of abnormally low interest rates overseas 2002-04 and a high Kiwi dollar, the banks locked in cheap funding overseas for fixed-rate mortgages at home.

Second, the booming property and mortgage markets gave mortgage brokers perfect conditions to grab business. In less than a decade, they have quadrupled their market share to more than 30%.

Banks played into the brokers' hands. Ruthless price competition between banks gave brokers the opportunity to sell themselves as the borrowers' friend, seeking out the best deal. But in the process, brokers and lenders have commoditised mortgages by selling on price rather than quality of product and service.

Banks have also given away business to brokers by devaluing their branch networks, stripping costs and skills, turning them, at best, into service delivery points rather than skilled sales forces.

Third, the booming markets have attracted innovative new lenders. Two Australian examples are Bluestone and Liberty Financial, which specialise in non-compliant mortgages. They offer products to people rejected by banks because of poor credit records. The companies argue they can handle the increased risk by charging more, by establishing good relations with the borrowers and by spreading their liabilities across a diverse portfolio of properties and locations.

But by introducing cut-throat rates, lenders have trashed their margins in an egregious example of otherwise sensible people seriously damaging their market.

The Reserve Bank has pushed up the Official Cash Rate by 2.25 percentage points since mid-2004 but the effective mortgage rate has risen by just 0.95%. This reflects the intense competition between lenders and that fixed-rate mortgages are much less profitable than floating for lenders.

The banks have typically halved gross lending margins but have maintained reasonable profitability by exploiting low funding costs, slashing operating costs and pushing through high volumes.

But all three favourable conditions have turned against them. Overseas interest rates have risen steadily since late 2004; there are fewer operating costs to squeeze out of their systems and staff costs are rising; and the housing market is slowing.

Meanwhile, banks have another pressure on profits: after strenuous efforts by IRD and government, they are now paying nearly the full rate of corporate tax after years of exploiting debt-funding to reduce tax bills.

The mortgage market can only get bloodier from here. Borrowers will be the first peopl

srotherh
11-09-2006, 07:02 AM
Oopps
http://www.smh.com.au/news/Business/Borrowers-lose-homes-at-record-rates/2006/09/10/1157826797663.html

Pennywise
17-09-2006, 10:53 AM
Bought for $262,500 in 2003, sold for $95,000 last week

http://www.smh.com.au/news/national/bought-for-262500-in-03-sold-for-95000-last-week/2006/09/16/1158334735688.html

duncan macgregor
17-09-2006, 11:53 AM
quote:Originally posted by Pennywise

Bought for $262,500 in 2003, sold for $95,000 last week

http://www.smh.com.au/news/national/bought-for-262500-in-03-sold-for-95000-last-week/2006/09/16/1158334735688.html
Absolutely sensational Pennywise. We can always find in any business transaction dummies that get succered in. Examples on the share market for instance[ FELTEX. Some of the happy punters bought at $1-50 sold at 10 cents which is a far worse situation to be in. macdunk

rmbbrave
17-09-2006, 12:12 PM
quote:Originally posted by Pennywise

Bought for $262,500 in 2003, sold for $95,000 last week

http://www.smh.com.au/news/national/bought-for-262500-in-03-sold-for-95000-last-week/2006/09/16/1158334735688.html


The article says the unit should return $130 a week in rent. At $95,000 the yield is 7%.

$95,000 is about right if you ask me.

Pennywise
17-09-2006, 12:13 PM
it is cetainly getting bad over there.

even at $95,000, based on suggested rent for a 1 bedder, the gross yeild is still only 7%

at $262,500[xx(]...2.5%!!!

Sydney first...
Auckland apartments in 18months-2years.

Pennywise
17-09-2006, 12:14 PM
RMB :D

George
17-09-2006, 03:53 PM
The response to my initial question has been sufficient to confirm my caution about buying at present. Also from Newland "What happens in Australia happens in NZ in 6-12 months".
George

Dean Letfus
06-10-2006, 07:06 AM
Th efundamentals of the property cycle never change. Booms are followed by slumps and then they boom again. Inside that are micro cycles affected by minor economic data and even the weather. But there is NEVER a bad time to buy a great deal.
The last 3 months in Auckland have been amazingly good buying because the weather has been so bad. I've bought 7 properties in August and September all 20% below valuation. Now that summer is on it's way sales will be higher and bargains harder to find. Next winter though we will be into a slump in the main cycle and the bad weather will help turn up some real bargains.
And as much as I respect Olly's investing ability his predictions are consistently wrong. In fact do teh opposite of his crystal ball gazing and you'll do well. Everybody who baled last time he told them to missed out on the biggest boom in NZ's history.

minimoke
06-10-2006, 03:20 PM
quote:Originally posted by Dean Letfus

I've bought 7 properties in August and September all 20% below valuation.

I wonder if activity such as this will lead to a “crash” – certainly a distortion in local markets.

It’s interesting to note that if you get something at a 20% discount off the paper valuation you then have to achieve 25% growth on the actual purchase price to get back to the original valuation. This is way in excess of Duncan McGregor’s 10% growth a year which attracts so much discussion.

patsy
21-10-2006, 02:08 PM
quote:Originally posted by broke

Property Crash? No.

Inflation? Perhaps.


As long as there is rampant inflation and excess liquidity like in NZ currently, there won't be a proeprty crash.

JBmurc
22-10-2006, 04:27 PM
Inflation is certainly out of control here on land in Queenstown
went to a 5 section action in arrowtown only 1 sold 525,000
had a look at the Jacks point sections aswell over 1000 sections in total to be sold.
$400-700,000[:0] mostly 700-900sqm No lake views 20mins+ drive to a boat ramp,30mins+ to Queenstown CBD
To Build a decent 3brm 240sqm house here your be paying at least $400,000 No extras.
- bottom dollar cost ==$800,000 Not exactly affordable housing for the future here ,still a few new houses in some areas for alot less but the future dosn't look to affordable, Once the buyers soak up the last of these There be only oneway for new houses prices to go

R2
23-10-2006, 03:02 PM
I agree with your observations JB, however I wonder if one scenario(boom or bust)can be predicted however as you note, property inflation including construction costs, have outpaced Wage inflation for a while now.

My view is that, so long as jobs remain bouyant (what large numbers of people do in Q'town to service a large mortgage I am not entirely sure), property will bubble along at +6-10% year on year until around 2010 given a 7 year cycle.

If there is high inflation (wages)property will take off again; if there is a major economic downturn and low immigration(nett), property will depress relative to the downturn.

My most likely guess, being a slave to the laws of equilibrium, will be that property will fall or remain relatively flat post 2010 for up to 7 years - after that time the changing profile of the population (ageing) will make it a new game for us all.

One thing that is clear, is that nothing is clear regarding the speed of future property appreciation, so it may well pay to be geared. acordingly.

For what it is worth I am certainly buying but funding to breakeven level and taking a very long term view. When the time is right the equity is available.

Don't know why everyone has to have it all whithin 2 years - on that basis there would never be any decent Reds in the cellar.

rmbbrave
25-10-2006, 07:34 PM
Housing boom over so rates 'should not change'

Wednesday October 25, 2006


The Reserve Bank is likely to leave interest rates as the boom in house prices appears to be all but over, economics house Infometrics says.

Senior economist Gareth Kiernan said June quarter house prices from Quotable Value last week were evidence that the five-year boom was "all but over".

"Over one-third of local council areas experienced price falls over the June quarter, and the nationwide increase in house prices was just 1 per cent. Both figures were the weakest since 2001."

Mr Kiernan said higher interest rates, and the effect of the high kiwi dollar on export incomes, had finally combined to affect property prices in provincial areas.

"Kaikoura and Mackenzie are now experiencing annual price declines, with other provincial areas such as Otorohanga and Westland at risk of the same fate."

Mr Kiernan believed the house price data would reassure the Reserve Bank its methods were working ahead of tomorrow's official cash rate review.

Infometrics' latest property forecast puts national house price inflation slowing to below 2.5 per cent a year by next September.

It expects economic growth to accelerate to above 2.5 per cent a year by the second half of 2007 - "a rate that is still sufficiently slow to ease inflationary pressures further over the next year".

It predicts that the Reserve Bank will not start to lower the official cash rate before December next year.

- NZPA


http://www.nzherald.co.nz/section/story.cfm?c_id=3&objectid=10407549

George
13-12-2006, 06:40 AM
Re to my first post - On tv last night, 'No Commission Property Sales' may be liquidated and a young couple are out 9 grand. A..holes like that should be put in public stocks and have rotten fruit biffed at them. They would probably say anyone who believes them deserve to get ripped off. Another example of the need for financial education before committing funds to any venture.
George.

Steve
13-12-2006, 11:59 AM
quote:Originally posted by George

Re to my first post - On tv last night, 'No Commission Property Sales' may be liquidated and a young couple are out 9 grand. A..holes like that should be put in public stocks and have rotten fruit biffed at them. They would probably say anyone who believes them deserve to get ripped off. Another example of the need for financial education before committing funds to any venture.
George.

George, do you know of a link to this?

TIA

George
13-12-2006, 04:19 PM
Steve, not sure what you mean!!

arco
27-12-2006, 12:59 PM
I heard on the news recently that each day an additional 77 people are settling in AKL. That should keep something bubbling.

http://news.emigratenz.org/2006/06/

June 06.

More new migrants will be welcomed under the New Zealand Residence Programme during the next 12 months in response to continued skill shortages, Immigration Minister David Cunliffe announced today.

“Up to 52,000 places offered to migrants means more vacancies will be filled,” Mr Cunliffe said.

“This will help employers who continue to say skill shortages are a constraint to the growth of their businesses, and will contribute to economic growth.”

There will be a minimum of 47,000 and maximum of 52,000 places available for the 2006-07 year. This is the highest number since the 2001-02 year.

“More fundamental changes to the residence programme are being looked at by the government for the 2007-08 financial year,” the minister said.

“One option being considered is setting the residence programme in place for several years at a time.”

Mr Cunliffe also announced a policy change that means more skilled migrants with work experience in areas of “absolute skill shortage” will gain points towards residence in New Zealand.

Effective from 24 July, work experience in countries considered non-comparable labour markets, such as India and China, will be recognised in areas of absolute skill shortages.

Absolute skill shortages are defined as world-wide shortages that show little sign of easing.

“This includes occupations such as IT professionals, plumbers and engineers, and will mean we don’t miss out on these types of highly talented people, no matter where they’re from.”

Applicants will be required to have recognised qualifications in their area of skill, and meet any registration requirements of their occupation. They will also need to meet standard immigration criteria.

And....................

Auckland and Wellington are cheaper to live in than a year ago - according to the Mercer survey of the world’s most expensive cities.

Of the cities studied, Auckland is now the 100th most expensive place to live compared with 69th in 2005.

Wellington is the 105th most expensive place to live, compared to 76th last year.

The survey takes the cost of living in New York as its base and compares other cities to this base.

The apparent fall in Auckland and Wellington’s cost of living has come about because the NZ Dollar’s exchange rate has fallen against the US Dollar since the same time last year.

Anyone bringing money to New Zealand from overseas will find buying goods in New Zealand cheaper than last year.

People who have been living in New Zealand won’t notice a fall in their cost of living. They will, however, notice that it’s more expensive to move to another city overseas now than if they had moved last year.

New York’s cost of living was 100 points; Auckland’s was 72.9 points and Wellington’s 71.1 points.

The world most expensive city, Moscow was 123.9 points. London - in 5th place - was 110.6 points. Sydney was Australia’s most expensive city - in 19th place - with 91.3 points.

arco
27-12-2006, 04:43 PM
A few interesting stats

Where are you likely to Settle in New Zealand - Auckland??

If you're from Asia, it's likely you'll migrate to Auckland. Only 35% of Asian migrants settle outside the Auckland region.

Auckland seems to be less of a magnet for non-Asians. 57% of British migrants and 55% of European and North American migrants settle outside the Auckland region.

http://www.emigratenz.org/NewZealandImmigrantOutcomes.html#Where