NZ 1st homebuyers are ScReWeD...

[beacon]

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.

Weren't they there before? Surely, they haven't just started doubling after Government's stated intention to tweak residential property legislation ...

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.

We can speculate on motives and eventual possible outcomes till the cows come home. The fact remains that the number of listings has increased. I'll let the facts speak for themselves ...

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.

These are real people we are talking about - the very "taxpayers" who've sweated and toiled blood and tears, who've saved and sacrificed to build wealth. These are the worker bees who saved and metamorphosed into investors. We guarantee and protect the savers but write off investors as being "greedy", "opportunistic", "canny bastards". Are they really? Who would you nurture instead?

Maybe they are canny, and maybe they are not. The issue is equanimity. Why single them out for punishment? Simply because they are too unorganised as a lobby?

What we have to hope for is that the changes don't impact heavily on government and local body housing stock

Will hope suffice? We are driving towards an incoming train and hoping there'll be very little damage - literal or collateral. Appropriate timely action has a better chance at averting disaster. Sure, there'll still be private landlords. But they will have to pass on an increasingly bigger portion of their increased costs onto ... tenants. As more private landlords quit this industry, guess who has to pick up the mantle? Was this outcome intended or foreseen by the government planners? Or will it be philosophically written off as minor collateral damage... If so, to what end?

In the hope that capital will migrate to creating national economic wealth. Without building the necessary ground for it? What groundwork has the Government completed to facilitate this? What eductaion has been imparted? Is the NZX now better at communicating company disclosures? Are the property trusts not still charging fees on assets under management and regardless of their mismanagement of assets versus taking their fair share from profit? Are our companies now fairly valued or better managed? Have we put any while collar criminals behind bars yet?Yeah right. And pigs will fly. At best, we will just create an industry that engages in speculation or enforce a transfer of wealth to a fund management industry that's badly let the nation down.

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.

Pardon the vanity, but I am beacon. I am expected to be miles ahead - to look ahead. I profess no special powers or privilege to see clearly what is two miles down the road, but being ahead of some I do see what's ahead a bit earlier than them. I am happy to be a lone voice. (Readers - exercise your own judgement before taking any action based on anybody's expressed views)

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.

You're looking in the wrong place again brother. Forget the headline teasers. Go look at what's happening with LVRs. You'll have a better understanding of what I'm on about.

[minimoke]

You'll have a better understanding of what I'm on about.

I'm trying to keep up. To recap: you think that potential tax changes, yet to be made by government, on rental properties held by Mums and Dads will lead to an increase in rent. A side effect is that house values will drop making them more affordable for first home owners. The rental issue probbably belongs on another thread.

As for the tax changes making it easier for first home buyers I'm not so sure. Too much rental stock is held by central and local government - they won't quit that stock on the back of tax changes. A pile of other stock is held by long term investors who will see this part of doing business, they'll adjust and continue holding their stock. So on the whole there won't be more stock coming to market from rentals causing values to drop.

This leaves a few mum and dads who might be on the edge - and tax changes may create more distress. They will have to decide to either take an ongoing few grand annual knock from a lack of cash / tax beifits. Or alternatively do they take a one-off hit and sell at a discount. Some will certainly take this option - but enough to drive values down over the long term I'm not so sure.

If you are right and rents do go up - then this will make it harder for first home owners to save their depsoit - which will leave them out of a market for longer. During which time I reckon there is a risk of property values increasing - even if only a little.

[beacon]

Sound argument again, as usual minimoke. Rents will have to rise for the property market to rise, long term. In the near term, there are few positives that I can see ...
Keep writing. I appreciate your thoughts.

[beacon]

http://www.stuff.co.nz/business/3387...a-set-to-widen

Other factors emerging to drain economy's blood.

[minimoke]

http://www.stuff.co.nz/business/3387...a-set-to-widen

Other factors emerging to drain economy's blood.

Despite that more people prefer to come to NZ than prefer to leave. In todays news:
"New Zealand recorded the highest annual immigration in more than five years as fewer Kiwis headed overseas, providing added stimulus to the housing market and underpinning consumer demand.
The number of permanent arrivals exceeded departures by 22,588 in the 12 months ended January 31, according to Statistics New Zealand. That’s the highest since May 2004."

[Skol]

The residential property prices in NZ just don't add up if you do the numbers, I think they're due for a big hit. I travel a lot and in the USA and parts of Europe the carnage is extraordinary. In Las Vegas for example 70% of all residential property is in negative equity, and prices in parts of Florida and California are down over 70%.
The equity markets are still down 30/40% from 18 months ago, we are on the verge of increasing interest rates, but residential property in NZ seems to have recovered and I read is worth more in some places than before the meltdown. I'm afraid I don't get it.

[Dr_Who]

I'm afraid I don't get it.

You can thank increase numbers in net migration of people coming into NZ and wanting permanent accommodation. This is exasperated by the lack of finance to build new houses. So demand exceeds supply for the short term. I tend to agree that the numbers dont stack up and we may see a plateau in prices from here. Watch China and Aust to give directions of our market.

[mikeo]

Along with near-record immigration we also have apparently HUGE underinvestment in residential building contruction - value of consents issued sit around half the long term average, residential building construction need to grow 50% to return to 'normal' levels. Surely this will put pressure on supply in the med term?
And when you consider the cost of building is probably STILL higher than the value of the finished house I don't see this changing any time soon.
Bottom line I wouldn't be brave enough to pick any further increase in house prices but I think it would be an even bigger (or ill informed) call to to pick any decrease in house prices over the med-long term.

[minimoke]

T.... I travel a lot and in the USA and parts of Europe the carnage is extraordinary. In Las Vegas for example 70% of all residential property is in negative equity, and prices in parts of Florida and California are down over 70%.

But 9 Calfornia markets, in the latest Housing Affordability survey, are "severly Unaffordable" - and thats out of 11 in the whole of the USA. If if we look at housing affordability parts of NZ rates well. Bournemouth in the UK is at no 6, San Fransico is at 16th position. Its not till we get to 20th spot do we see Tauranga and then at 22 is Auckland. Australia is a whole lot more unaffordable than NZ - and that will help drive values in NZ. Nationals "closing the gap" rhetoric has to work at several levels.

[fungus pudding]

The residential property prices in NZ just don't add up if you do the numbers, I think they're due for a big hit. I travel a lot and in the USA and parts of Europe the carnage is extraordinary. In Las Vegas for example 70% of all residential property is in negative equity, and prices in parts of Florida and California are down over 70%.

Had a look around Chicago lately? Or for a real bargain pop over to Detroit.