Population Growth and Growth in Property Values

[rmbbrave]

Before that happens you'd need a big rise in unemployment followed by a big cut in interest rates.

As it is, unemploment is likely to get lower as the 1946-50 baby boomers will be retiring in 2011-15 and there aren't enough workers to take their place.

New Zealand is one of the four countries - along with Australia, Canada and the US - that had the biggest baby boom. And our boomers hit 60 this year(2006), meaning that in five years(2011), twice as many people will be leaving the workplace as entering it.

"We'll have the biggest demographic trough we will ever have experienced. There will be a war for talent and if we want to prepare for that, to attract and retain the best people, we need to create different environments."

[Mr_Market]

Indeed we do have high employment, however I feel that it will probably be some external catalyst that will sink our dollar. Inflation in Japan would be a good candidate.

[rmbbrave]

Baby boomers squeeze young home buyers from market

First home buyers will increasingly be squeezed out of the market as a rising number of asset-rich baby boomers with debt-free family houses try to cash in on property for their retirement.

More than a third of new mortgages are going to borrowers who own a house and that trend looks set to continue, banking industry experts and financiers say.

Many of the one million Kiwis ranging in age from 40 to 60 are fuelling the heated real estate market that has seen national house prices rise $35,000 in a year from $295,000 to $330,000 by December.

The investors already own a debt-free house so are easily able to out-bid those trying to get their foot on to the housing ladder. Debbie Bell, ASB's corporate communications head, said lending to existing homeowners was up by a third in the past three years.

"People who already have a house are buying because of the capital gain," she said. "They can get 100 per cent finance to buy their next place and by the time a deal settles, prices are rising so fast they can find they already have 5 per cent equity in the place. Even with a mortgage at 9 per cent interest, they get the rental income plus the capital gain and can sell in a couple of years with a good profit."

But baby boomers were not the only competition for first-home buyers, she said. Investors living in Australia, Britain, the United States and Asia were buying here and an upsurge of migrants were also making the going tough for new buyers, Debbie Bell said.

Jeff Staniland, Mike Pero Mortgages' chief executive, said the business did not collect data on how many property owners applied for mortgages. But he believed many franchisees would confirm this was a growing trend because of people's need to create wealth and the strong real estate market.

Housing Minister Chris Carter is examining ways to address housing affordability. He is talking to councils about bringing in new incentives or rules so developers build lower-cost housing in new subdivisions and developments. And the Centre for Housing Research will this month release a major study on the future of Auckland homeownership and the role of the private rental market.

Shamubeel Eaqub, research director at Goldman Sachs JBWere (NZ), said people should not be surprised to find a large portion of residential mortgage lending was going to homeowners for investment because a growing portion of the population were at their peak earning power.

"We have known about this demographic bulge and this also explains why house prices appear to be set by investors and not owner occupiers as was traditionally the case," he said.

He is concerned about the situation, questioning what happens when baby boomers, born between 1945 and 1965, wished to liquidate their property holding if they are not planning to bequeath them.

Dr Gareth Morgan, economist and author of Pension Panic, is concerned about what he calls "New Zealand's caste of nouveau landlords" and predicts a glut of property when the baby boomers attempt to cash up their real estate at the same time.

Kieran Trass said many banks viewed lending to property investors as a better proposition than financing first-home buyers. "No formal data is held on what mortgage funds are used for but I've thought for years it should be monitored by the Reserve Bank and sourced from the individual lending institutions," he said.

"Many property investors have given up waiting for the long-ago predicted property crash and are actively buying properties now."

But James Lockie, director of General Finance, disagreed, saying only 34 per cent of all his firm's loans went to investors.

"About 66 per cent of our home loan lending last year was for owner occupiers," he said. Westpac chief economist Brendan O'Donovan questioned whether there had been a substantial rise in mortgages issued to existing home owners.

He had not seen any data to show a dramatic increase in lending to this sector, he said, and he doubted there had been a big shift in pat

[rmbbrave]

High rents force Kiwis out

Skyrocketing property prices are making more New Zealanders "homeless", with families forced to share properties and boarding houses increasingly full.

Wellington Housing Trust coordinator Alison Cadman said there had been a significant increase in homeless families as Wellington's rents increased. High market rents and increasing pressure on council and Housing New Zealand properties meant more families were doubling-up.

A nationwide steering group has been set up to deal with homelessness, which increasingly includes families living in hostels, boarding houses or with friends and relatives because they cannot find a home.

The group, which includes Auckland, Wellington and Christchurch councils, district health boards, government and social agencies, met for the first time this month.

Wellington Regional Public Health social environment adviser and steering group member Clare Aspinall said the problem was hidden. "Homelessness isn't just about people with addictions living on the streets. A lot of New Zealand people would be surprised to find out who is homeless."

But it was not known how many New Zealanders experienced homelessness, because limited data was collected.

Ms Cadman said the situation created health problems due to overcrowding and rising tensions within families. "I've had quite a few mothers calling saying they have their (adult) children and their families living with them and they can't stand it any longer."

Capital City Lodge, which provides longer term accommodation, is upgrading its Newtown site to cater for increasing demand. "There are just so many people – just normal people, just trying to find a place to live, or a roof over their heads", manager Will de Cleene said. One resident had reported up to 100 people going for a flat in Brooklyn this month.

But the shortage in Wellington is likely to get worse with the upgrade of Wellington City Council's housing stock after a $220 million government rescue package. The properties – largely bedsits – will be converted into two bedroom accommodation, but residents will have to be removed during the upgrade.

Ms Aspinall said the steering group had identified three types of homelessness, with "secondary homeless", those living in temporary accommodation – also known as couchsurfers – likely to be the largest growing group. The group was planning a range of strategies, but also needed government support, she said.

A spokesman for Housing Minister Chris Carter said the Government was aware of the issue and some work was under way.

He said more than 6000 state houses had been added in the past seven years and an accommodation supplement was available to assist low income renters in the private market.

[rmbbrave]

quote:Originally posted by rmbbrave

2 out of the 3 properties sold for about half of their RVs. The third was (illegally) withdrawn before the end of the auction.

1, The Rateable value / Govt. valuation was $480,000 and it sold for $220,800.

2, The Rateable value / Govt. valuation was $350,000 and it sold for $210,200.

A house in Massey, Auckland is for sale on a $1 reserve.

Vendor says "Registered valuation from March 2006 is $280,000".

Let's see how much this one goes for.

http://www.trademe.co.nz/Browse/List...px?id=94494903

[coge]

http://www.trademe.co.nz/Home-living...p-38616283.htm


If it looks like this I'd get an engineering report!

[rmbbrave]

quote:Originally posted by aspex

quote:Originally posted by rmbbrave

A house in Massey, Auckland is for sale on a $1 reserve.

Vendor says "Registered valuation from March 2006 is $280,000".

Let's see how much this one goes for.

http://www.trademe.co.nz/Browse/List...px?id=94494903

$1 reserves are a come-on.
The vendor always has the choice of a vendor bid because on Trademe there is only the placement cost to cover and you can start again.

Look's like you were right!

Something dodgy was going on.

From Trademe: This listing was withdrawn by the administrator

[rmbbrave]

Benefit numbers hit 27-year-low

The number of people on the unemployment benefit has dropped by a third in the past year to a 27-year low, and the overall working-age beneficiary numbers have dropped by 34 per cent since 1999.

Figures released today by Social Development Minister David Benson-Pope show unemployment beneficiary numbers dropped from 44,549 at the end of March 2006 to 28,845 at the end of March this year – a decline of 35 per cent.

The number of solo mums and dads on the domestic purposes benefit (DPB) also dropped 6 per cent over the same period.

But the figures show the number of people receiving the sickness and invalid's benefits continued to grow, by 4 per cent and 3 per cent respectively.

Since 1999 sickness benefit numbers have risen by 46 per cent and invalid's benefit numbers by 47 per cent.

Overall 265,747 working-age people are receiving a benefit down on the 401,415 receiving one in December 1999.

Mr Benson-Pope said the number of people receiving the unemployment benefit was now at a 27-year low.

He credited the Government's "active labour market policies".

The Government's Working for Families package was also successfully encouraging solo parents back into work.

Despite an ageing population growth in the sickness and invalid's beneficiary numbers was slowing, he said.

Maori Affairs Minister Parekura Horomia said the number of Maori on the unemployment benefit had dropped below 10,000 for the first time in years.

The number was now 9902 – down from 44,000 in 1999.

The official unemployment rate stands at 3.7 per cent – one of the lowest among developed nations.

National Party welfare spokeswoman Judith Collins today said the figures showed a "relentless" increase in the sickness and invalid's benefit numbers at the same time unemployment benefit numbers were dropping.

"No one would criticise a decrease in the level of unemployment. It should be embraced as the perfect time to reform aspects of welfare when there are jobs and opportunities in the economy.

"But what's puzzling is the relentless increase in the number of people collecting sickness and invalid's benefits, when there appears to be no epidemic of sickness and injury," Mrs Collins said.

"David Benson-Pope needs to explain how this can be, when the sickness benefit is supposed to be short term."

[Dean Letfus]

All these articles point out the obvious really. The baby boomers are getting ready to retire and the biggest boom in NZ's history is around the corner.
All we have to do is accumulate property as fast as possible and get ready to retire around 2012.
I love property

[rmbbrave]

"The baby boomers are getting ready to retire and the biggest boom in NZ's history is around the corner"

Most people argue the opposite Dean.

Retirees don't have as much income as workers and so they sell assets (property shares) to make up the difference causing a drop in property and share prices.

Most argue that more retirees leads to a slowdown not a boom.

I'd like to hear why you think...

"The baby boomers are getting ready to retire and [this will cause] the biggest boom in NZ's history ..."