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  1. #61
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    One things for sure -There are alot gunning for ole property owners-----Its still beyond me how the RBNZ could raise interest rates and still manage to talk down the currency--I personally dont think that they could successfully carry out their threats of controlling the currency by intervening in the market--but for now ,just the hint that they would has worked

  2. #62
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    Completely agree with respect to the LVR Moosie. It would only have taken a 10% decrease in house values to see many folk under water. Not to mention the exposure of the banking system. 20% is probably about the right number....for the whole country. Our young folk need to realise that getting into a house takes time effort and considerable saving. Just as it used to years ago. Nothing has changed there. As an aside...on our second house we had three mortgages...18, 21 and 24 %. Times were tough back in those days as well.

  3. #63
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    Quote Originally Posted by RTM View Post
    Completely agree with respect to the LVR Moosie. It would only have taken a 10% decrease in house values to see many folk under water. Not to mention the exposure of the banking system. 20% is probably about the right number....for the whole country. Our young folk need to realise that getting into a house takes time effort and considerable saving. Just as it used to years ago. Nothing has changed there. As an aside...on our second house we had three mortgages...18, 21 and 24 %. Times were tough back in those days as well.
    My parents enjoy regaling me with stories of their first mortgage at 24%. Though I too completely agree with the LVR restrictions. Younger people have gotten far used to credit and that is not an approach that should be taken towards housing. We touched briefly on the LVR in a few of my property/finance papers and I feel people are expecting results far sooner than changes like this generally take.

  4. #64
    Legend Balance's Avatar
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    LVR is proving effective.

    But to sting the banks, the RBNZ needs also to act on RAR - reserve asset ratio. Makes it more attractive to lend to businesses rather than houses.

    Meanwhile, I will go on record by saying we do not have a housing bubble - what we have is horrendous under supply and strong demand.

    What we also have is price inflation by councils who are increasing their charges without restraint - that is the single biggest problem.

  5. #65
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    I tell you, I'm temped to move out of Auckland - I love the idea of buying a house in say Dunedin and being able to pay it off in 10 years.

  6. #66
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    Try the far north. Better weather. Real estate also well priced. Great lifestyle !
    Kerikeri is great !

    Quote Originally Posted by vorno View Post
    I tell you, I'm temped to move out of Auckland - I love the idea of buying a house in say Dunedin and being able to pay it off in 10 years.

  7. #67
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    Quote Originally Posted by belgarion View Post
    Concur. Have bought a "semi-retirement" place there. discl: born and bred in Dunedin.
    haha...when someone says "don't go there, I used to live there!" then it certainly rings the warning bells!

  8. #68
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    Kerikeri would be my choice also ,if I was just getting started,assuming I could make a living there.
    We have always been pretty conservative when it comes to our debt to asset ratio--best to be safe.
    With todays prices in the Auckland area it is a big job though--requires some serious saving.
    Assuming you are capable of that,you would be able to get into a house quicker up North(ie Kerikeri)
    I would still stay away from the really depressed areas though.
    Last edited by skid; 29-07-2014 at 12:13 PM.

  9. #69
    Senior Member Whipmoney's Avatar
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    Quote Originally Posted by Balance View Post
    But to sting the banks, the RBNZ needs also to act on RAR - reserve asset ratio. Makes it more attractive to lend to businesses rather than houses.
    What do you mean by this Balance?

    If you force the banks to focus more of their lending towards business then you will end up with over-leveraging in this sector which would have potentially catastrophic long-term effects.

    The goal of the LVR restrictions was to lower the aggregate leverage in the housing sector which in turn leads to a higher national savings base as a higher deposit is required. It wasn't intended to force banks to lend more heavily into other sectors (e.g. business/property/farming) as a substitution effect.

    By reducing the leverage in the housing sector you reduce aggregate demand and therefore prices and the excessive returns. Lowering of the returns in turn leads to an incentive to 'invest' in other asset classes (e.g. shares or bonds) which is good for the countrys overall capital structure.
    Last edited by Whipmoney; 29-07-2014 at 03:38 PM.
    Truth is like poetry. And most people f*cking hate poetry.

  10. #70
    ShareTrader Legend Beagle's Avatar
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    I was surprised at how high the prices are in Kerikeri when I was up there recently. Nice place though and good weather.
    Whangarei has more job opportunities, warm weather and is cheap.

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