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  1. #16
    Senior Member warthog's Avatar
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    Quote Originally Posted by belgarion View Post
    warthog, FYI - the UK banks enforce LVR ratios themselves and have done for years.
    In NZ/AU yes. For now! If left to their own devices, as elsewhere, they will blow themselves up.

    E.g. When I applied for a 95% mortgage the normalised rate offered (i.e. with mortgage indemnity insurance capitalised into the loan amount) was huge - circa 2.5% above what I'd have got with a 25% deposit. And this was with only 20% of our combined incomes servicing the debt which I could have serviced on my own income alone at less than 50%. ... The UK and Europe (and the US for that matter) are very different to NZ and Oz.
    Yes indeed. The hog was once offered a 120% mortgage with some thousands in cash as an incentive by a large anglo-saxon bank.
    warthog ... muddy and smelly

  2. #17
    Senior Member warthog's Avatar
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    Quote Originally Posted by turmeric View Post
    Different policy tools different objectives mate. Suggest you have a read up of the details of both and why they are employed.

    As for the first paragraph it says nothing in regards to your very bold statement let alone provides any data. Can I assume that your statement is simply your opinion? If so, duly noted. If not, Im interested in the source of data that substantiates your claim.
    If it is so effective, why is it likely to be canned?

    The RB does not have a particularly robust track-record for managing interest rates, inflation and the housing market.
    warthog ... muddy and smelly

  3. #18
    Senior Member warthog's Avatar
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    Quote Originally Posted by turmeric View Post
    We have been over this before, there is some info in this thread that will clear things up for you.
    What specifically are you referring to?
    warthog ... muddy and smelly

  4. #19
    Senior Member warthog's Avatar
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    Quote Originally Posted by turmeric View Post
    Sorry mate, didn't see your post.

    So just to clarify, you were saying the LVRs haven't been effective
    No, never said that. They are effective, but the impact blows out to areas where maybe increased house ownership may be preferable.

    you say the LVRs are likely going to be canned - where are you getting this information from?
    http://www.nzherald.co.nz/personal-f...ectid=11252242
    http://auckland.scoop.co.nz/2014/05/...ctions-may-go/
    http://www.landlords.co.nz/article/5...lauds-lvr-move
    http://www.nbr.co.nz/article/reserve...says-bd-155881
    http://assuredproperty.co.nz/lvr-rul...o-by-year-end/

    Of course, this could all be hot air.
    warthog ... muddy and smelly

  5. #20
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    Quote Originally Posted by turmeric View Post
    The place I do agree with you on is the regional aspect of the LVRs. The RBNZ have outlined the basis for their decision in this respect on one of the documents I posted.

    What I will say though is that the housing issue needs to be tackled effectively jointly by central and local governments. Im pretty happy that the RBNZ has done about as much as they can to help NZs housing problem. Central and local governments are the ones who have been slacking,the supply issue is a massive one and some traction should have been made on this long ago. Its not like it was an issue that came out of no-where. Housing supply in AUCK for example has been an issue for some time now.
    There is NO supply issue in Auckland
    http://www.sharechat.co.nz/article/d...tage-nzierhtml

    Westpac report 'Where Should We Build Now' sugests that Wellington andvTasman aren't building enough houses

    Canterbury is a story in its own right

  6. #21
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    http://nzier.org.nz/media/better-gro...-media-release

    If nothing else the heat map of regional property prices is interesting

  7. #22
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    Quote Originally Posted by turmeric View Post
    Do you still belive this mate?

    http://tvnz.co.nz/national-news/conf...-homes-5990838

    "Official documents given to ONE News yesterday shows that Housing NZ needs 3000 more homes in Auckland to meet requirements."

    Also remember when I said that it was the government not the RBNZ that needed to pick up its game?

    "As part of Housing NZ's plan 2000 new homes were to be built in Auckland by late next year, but come February only 81 had been finished. "

    Supply is a problem, the government is failing, and now as a result "Housing NZ has resorted to buying homes on the open market in an effort to try and meet urgent demand for state housing."

    Absolutely hopeless - so we have a problem with house price inflation, but now after failing to sort the problem on the supply side, the government is now adding to the demand side problem. And you guys think the RBNZ is "not that decisive"?? Get your heads out of the sand people!!

    http://tvnz.co.nz/breakfast-news/con...-video-5990843
    Jeez you turn a different problem into an argument to support your own views. Even the headline to the story said 'confused'

    Nothing to do with a shortage of houses - all about the inept workings of Housing (prob only doing what the govt tells them anyway) in not keeping up with demand for houses for the so called needy.

    Last census figures reported 509k dwellings in Auckland (of which 33k were unoccupied by the way) sort of suggests that even through their own failings they are 3000 short doesn't cry out and say there is an overall supply problem

  8. #23
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    you grumpy today turmeric

    Have you considered that maybe, just maybe, the government (HNZ) has purposely not really put much effort into building these 3000 houses.

  9. #24
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    What happens in Auckland affects NZ..unfortunately,we had to fund my daughter's extra deposit to get a mortgage recently thanks to the ongoing greedy shenanigans in Auckland...

    I'm more inclined with Winners argument .. the stats show there isn't that big of a shortage in Auckland..
    To add to that.....I recently had a chat with some 40 somethings.. they were Hamiltonians who left their jobs and were making serious money by House flipping in Auckland..... buy up property, doing "cosmetic" renovation, keep that property for about 6 months then sell it for a quick capital gain ....during this time the house remains empty...stops Tenancy Act hassells in trying to get the tenants in and out quickly + no tenant property damage risk...These buggers are sure that house flipping is happening a lot in Auckland at the moment..

    As this is a shadow economy activity there is no actual data as to how many unoccupied pre-flipped houses there are in Auckland...by the sounds of it from them it wouldn't surprise me if there were hundreds if not thousands ...
    Last edited by Hoop; 04-06-2014 at 01:33 PM.

  10. #25
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    Pretty pictures in this report from ANZ.

    http://www.interest.co.nz/sites/defa...May%202014.pdf

    Page 7 has an updated report on housing supply demand. Summary

    The demand and supply for housing in New Zealand is broadly in balance. However, there are clear regional differences. Auckland, Christchurch, Wellington and the Bay of Plenty have a shortage of stock; conversely the rest of New Zealand has a surfeit of supply. While Auckland has a clear housing shortage, updated estimates using last year’s Census figures are not as dire as previously thought and help explain, in part, why the rental market has not followed general house price trends and gone ballistic.

  11. #26
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  12. #27
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    Seems like Auckland just like Dublin

    http://www.davidmcwilliams.ie/2014/0...-estate-agents

    Interesting concept about only lending against the average house price for the last 20 years instead of the latest -

    Abstract: The way to stop house prices rising dramatically from here is to stop credit going to housing, because ultimately credit drives asset prices. This can be achieved by preventing banks from lending excessively against property. If we were to lend against the average house price over the past 20 years, rather than the last price rise, it would prevent the inbuilt dynamic which links banks to credit to house prices kicking off again.

  13. #28
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    Quote Originally Posted by turmeric View Post
    Still interested in your take on this Schrodinger.

    In the mean time RBNZ looking at possible intervention in NZD

    http://www.sharechat.co.nz/article/1...l-currencyhtml
    Back in the day when I was studying Economics inflation was their key concern primarily due to NZ high levels during the 80s. When this was brought under control they decided to recently add unemployment to their box of tricks. In reference to their breach mandate I was indicating that they are keeping an close eye on the housing market but use inflation as the excuse. Since housing makes up a component of inflation (25%?) and is rampant in Auckland etc there are indications that hikes in the OCR are driven by housing and nothing else. This being the case they have failed to build long term wealth in NZ by killing the export sector and domestic invesment. This is not only their fault as the governments inaction to have sensible housing policy for all NZ. This failure in policy makes the RBNZ task harder.

    Not sure how they balance both long term and short term but raising the OCR to kill exporters and business which wont help the country in the long term. Also hearing about NZ's "Rock star economy" makes me smile. With growth around 2.5% it is equal to US/UK. Singapore has a Rock star economy but we just accept whatever is told to us.

    In summary the recent hikes are about housing and nothing else. As I am aware it is Aucklands housing and not businesses that are the governments/RBNZ concern. We should be governed by smarter people and not muppets.
    Last edited by Schrodinger; 09-06-2014 at 08:15 AM.

  14. #29
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    Aussie GDP apparently 3.5%

    Not too bad when stories say country in the ****

  15. #30
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    Should quote other relevant stuff from that article for completeness sake, in that the bottom end of he market is doing OK

    Abstract:
    Mr Ingerson found that more houses, flats and apartments priced in the bottom 10 per cent of sales values were being sold in Auckland than at the same time last year.

    In the first three months of the year, 11.7 per cent of sales in greater Auckland were from properties in the bottom 10 per cent of the price ladder.

    A year ago, that was 10.1 per cent.

    "Rather than the bottom end of the market plummeting since the LVR speed limits came on, activity has stayed stronger than the long-term average and above the same time last year," he said.
    http://www.nzherald.co.nz/property/n...ectid=11270157

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