NZX & The Big Housing Bubble
Crumbs, all these NZ real estate companies now flooding into China to entice all 1.4 billion Chinese to buy houses in Auckland, I’m not sure they will all get one each, but certainly the ones that do seem willing to pay a whatever price.
Other countries have a foreign ownership registers and restrictions on ownership, but New Zealand it seems is totally wide open for business, speculation and an uncontrolled boom, and apparently it’s just the beginning, but what happens when they all want to go, can't put those houses on a boat.
The councils are opening up land for a flood of supply, the RMA is being modified for a flood of supply, house hold debt levels linger close to all-time highs, there is an ever increasing culture of wanting to “get on the property ladder” with 5% mortgages, and mortgage rates are presently in a dip but may snap back steeply soon enough.
Then there is the mater of the baby boomers with 73% their savings in property. This is a much much bigger issue in NZ because of the local historical obsession with real estate investment. New Zealand boomers pumped more cash into it than any other country, and from here on forward they will now suck it out as income.
It’s a recipe that’s looking like more fun than the kid’s bubble bath, might even be a more interesting watch than a Dutch tulip action ?
So which NZX companies are most at risk ?
Retirement villages RYM, SUM, MET with up to 45% of their annual income presently derived from fair value movement in investment properties ?
The ARG, DNZ, GMT, KPG, PCT, PFI and VHP type property investment companies ?
Other companies with significant land holdings perhaps AIA, MELCO etc ?