NZ 1st homebuyers are ScReWeD...

[minimoke]

listings in Waitakere since jan 09 up 20% now
listings in Waitakere since jan 09 up 35% now (M&D and small landlords)
listings in Manukau since jan 09 up 11% now
listings in Manukau since jan 09 up 25% now (M&D and small landlords)

Rents to follow up ... watching this space ... hope the powers that be are noticing the pain and desperation ...

When a willing buyer meets a willing seller you'll also have migration TO these asset classes.

Some of those buyers may be existing renters - which means they will leave their rental which means one more rental vacancy which may lead to a decrease in rents.

[beacon]

Wake up fp. Your first half at Economics 101 education shows your mind has been wandering. The listings I talk about are "For Sale". Two extra "For Sale" correlates with approx one less house available "For Rent". rents will rise, though prices may stagnate or fall.

you did pick up their skinny margin. So you were paying attention for some time (friendly smile, I can't seem to find emoticons)

[beacon]

When a willing buyer meets a willing seller you'll also have migration TO these asset classes.

Some of those buyers may be existing renters - which means they will leave their rental which means one more rental vacancy which may lead to a decrease in rents.

In normal conditions, yes. The conditions are not normal. We have a naescent recovery, if at all, and it is reportedly anemic. Credit conditions remain tight. You have increased sellers, but where are the buyers? The market remained robust earlier due to lack of listings, as people held out. For unreasonable expectations, some say. I suspect most of it was due to an understandable lethargy to crystalize loss (regardless of whether the loss of equity was notional or real). Meanwhile, the council rates went up, insurance went up, even fixed term mortgages have been climbing. Repair costs have risen, and will rise post GST increase. Rent arrears have been climbing, and judgements remain unenforcable (Justice delayed is generally Justice denied). More people are living with extended families and rents have been falling in real terms. Then you have the last straw - the cashflow crunch that will be caused by removal of depreciation deductibility.

So I see more "For Sale" houses, meaning maybe more choice for first Home Buyers and a slight improvement in affordability for them.
I see restrained investor buying activity until credit conditions improve, meaning a property market that stagnates or falls, with repurcussions for capital markets.
I see rents rising unless conditions change...

[beacon]

Economics 101. First day - before lunch. Empty houses and an abundance of listings reflect an oversupply, which will lead to falling rents; not rising. Landlords don't sit back and leave properties vacant for long waiting for rents to rise. They meet the market - and quickly. Most of them have such skinny profit margins (if any profit margin at all) that they can hardly just sit and wait even if they are silly enough to want to.

You did pick up on their skinny margins. So you were paying attention for some time (friendly smile, I can't seem to find emoticons)

[fungus pudding]

You did pick up on their skinny margins. So you were paying attention for some time (friendly smile, I can't seem to find emoticons)

Your computer is faulty. Mine's gottem!

[beacon]

Your computer is faulty. Mine's gottem!

Bugger! Computer is latest state of the art, not that I know much about these baffling wonders. Must be something to do with our security settings ...
Let's try this

[fungus pudding]

Bugger! Computer is latest state of the art, not that I know much about these baffling wonders. Must be something to do with our security settings ...
Let's try this

Bugger! I was hoping you'd rush out and buy an even newer even more state of the art (whatever that weird slogan means) more wondrous, more baffling and most of all, more expensive baffling wonder only to discover it too could not produce emoticons.

[minimoke]

but where are the buyers?

They haven't disappeared. There were only 40 less sales this january compared with last January - and January is typically pretty slow.But those buyers were buying - time on market was less this Jan (43 days) compared with last Jan (59 days) and they were paying 7.7% more than a year ago.

[beacon]

There were only 40 less sales this january compared with last January - and January is typically pretty slow.But those buyers were buying - time on market was less this Jan (43 days) compared with last Jan (59 days) and they were paying 7.7% more than a year ago.

Thanks for the data update minimoke. Both - sales as well as time on market - vindicate my point that the market has held up well so far. Sales and Time on market are lagging indicators, listings are a leading indicator. Its safer driving looking in the windshield than in the rear view mirrors. Hence, my thesis that we may be looking at an upcoming market that while easier on first home buyers may be hard on M&D sellers, smaller investor vendors as well as renters. I see no investor buyer activity because of tight credit.

[minimoke]

Thanks for the data update minimoke. Both - sales as well as time on market - vindicate my point that the market has held up well so far. Sales and Time on market are lagging indicators, listings are a leading indicator. Its safer driving looking in the windshield than in the rear view mirrors. Hence, my thesis that we may be looking at an upcoming market that while easier on first home buyers may be hard on M&D sellers, smaller investor vendors as well as renters. I see no investor buyer activity because of tight credit.

Looking for lead indicators is a fine idea as long as your windshield is clear and you don't have double vision.

If you are looking at listings as a lead indicator you may be seeing several things.

For a start the statistics may not be clearly showing the number of agent multi-listings - hence you may have a bit of double vision.

And like cardboard policemen on the side of the road - are the listings for real or are they a bit of a mirage. As the economy comes out of recession people will start to have a bit more confidence about their jobs. As they gain more confidence they are more likely to consider their debt position - and part of this might include trading houses. There may be listings out there that are people just giving it a shot to see what happens. If the price is right they'll sell. If its not then they'll hold until there is movement.

What you might want to look out for on the road ahead is the road kill. You might see some Minor birds on the road which you reckon are bound to end up dead - but they are canny bastards and they will be fine. Will changes in depreciation rules create distressed sellers like possums on the road at night. Sure there will be a few of these - there always were - there always will be. What we have to hope for is that the changes don't impact heavily on government and local body housing stock - that would be like sending a cow out on the road as it creates a risk of bringing you down as well (through increased personal taxes and rates to cover the extra costs). And of course the depreciation rules are unlikely to hit that big 16 wheel semi coming towards you - they are in and out your vision before you know it.

When you are looking out your windscreen can you see clearly down to the end of your driveway? One thing’s for sure - you can't see clearly what is two miles down the road. I'm waiting for the government to actually announce its changes to residential investments to give me clarity.


Meanwhile back to credit. This week we've seen Westpac lower two of their rates so that their 5.65% floating is the lowest in the market.