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Originally Posted by turmeric
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
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Originally Posted by turmeric
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
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Originally Posted by turmeric
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
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Average property price fell for the 2nd quarter in a row in Auckland. I'm not reading too much into it as there are lots of dips in the graph, but my gut tells me that it's levelling off a bit. Can't say where I got the data from, but it's 100% reliable.
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Originally Posted by belgarion
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
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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.
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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.
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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.
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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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