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Auckland housing market
I have a lot of time for Rodney Dickens and his views (not just because I tend to agree)
How will NZX stand up in another recession?
http://www.sra.co.nz/pdf/RecessionMay14.pdf
Abstract
This flaw and the way successive governors have gone about achieving the target of low inflation have made recessions by-products of monetary policy. This Raving explains the fundamental flaw with the inflation target and shows that Governor Wheeler plans to some extent to follow in the footsteps of his predecessors which means another recession is likely if not inevitable.
Last edited by winner69; 08-06-2014 at 05:10 PM.
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Of course Winner.
The big question is when?
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RBNZ governors use the rear wind mirror to set monetary policies.
Enough said.
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Originally Posted by snapiti
I cant understand the latest increase's in the OCR inflation is well under control and has been for a long time.
Doe's not effect me personally but it will put a damper on consumer spending.
Its a matter of being ahead of the game to avoid unnecessary reactionary decisions that will inevitably lead to a recession.
Better to 'smooth. things out and avoid shocks
Non-tradable inflation already over 3% and heading higher
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Originally Posted by snapiti
I cant understand the latest increase's in the OCR inflation is well under control and has been for a long time.
Doe's not effect me personally but it will put a damper on consumer spending.
They are worried about housing and want to stop the bubble. They are going away from their inflation mandate and technically in breach of their mandate.
The continual rise in interest rates will most likely cause big future problems for exporters via a high currency. Currently the US and japan are proactively devaluing their currencies to kick start their economies. NZ has decided to go with the high currecny option at the expense of exporters due to housing.
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Originally Posted by snapiti
thanks schrodinger I think your post is highly accurate.
It is mainly housing in Auckland and Christ churh going up in value
I know of three existing houses around my place that have sold to rich overseas people and have been rented back to to Kiwi people. May be do what they do in Australia , and make rich over seas people build new houses in Auckland, it might help the shortage and make it a bit easier for the Kiwi person to get into a home.
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Unemployment is just as important as inflation when setting the OCR
http://www.interest.co.nz/opinion/63...-activity-some
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RBNZ seem to be leaning towards not making as many OCR hikes as previously intimated
And under pressure(?) changing tack on the LVR thing
A few months ago they seemed to at least a plan - good.
But now they seem to be indecisive and dare I say it getting into reactionary mode - not good
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Well if he set out to "cool" the housing market he done a fantastic job in completely stuffing it
http://www.stuff.co.nz/life-style/ho...rtgage-braking
Quote - The figures showed a deepening of the trend of weaker sales volumes
And worse still
The volume of sales has now moved back to 2012 levels, and was the seventh-lowest recorded by REINZ in 23 years.
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I can explain it--Home owners(in Auckland at least) are realizing that it is just to dang expensive to sell and buy another house ,with real estate fees and moving costs etc.--Instead they are staying put and renovating.
When I look around Auckland there are houses getting renovated everywhere.
The numbers may have cooled but I have'nt seen a major drop in price to suggest they have stuffed the housing market.
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