PROPERTY CRASH - YES/NO

[JBmurc]

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]

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]

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/st...ectid=10407549

[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.

[Steve]

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]

Steve, not sure what you mean!!

[arco]

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]

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/NewZealand...mes.html#Where