Editors choice comments
The RBNZ so nearly had the cat in the bag. Then...it lowered interest rates! The price of money; the interest rate, is not the problem the NZ economy has. It's the malinvestment caused by those lower interest rates. "But the dairy farmers need lower interest rates to insulate them from falling commodity prices!" will be the cry. But if they'd had to contend with higher funding rates in the first place, perhaps they wouldn't have gone holus-bolus into overcapacity in the first place? The horse has bolted. The NZ economy is headed for pain. It's only a matter of how much,and not what the OCR...by: bw
"which means the prices have risen by 25.5% in the last year, equivalent to $3067 a week."
That's $30,670 a week for Property Investors with 10 properties. Or $1,594,840 for the year!! Beats working!
What effect did the RBNZ 4 hikes in 2014 have on the Auckland housing market? None.
How much money earned in NZ was wasted on unnecessary relatively high interest payments?
What has inflation been over the last 12 months? CPI projections for 2015/2016?
A unit in my street sold for $480k a year ago and $600k last week. At this rate it'll be worth a million dollars in a few years.
I'm not buying in Auckland any more. I don't mind a bit of negative gearing for a few years until cashflow turns positive but positive cashflow on most properties sold nowadays will take decades to achieve.
Despite my past bullishness and confidence I am now resigned to the fact there will have to be tears. Dare I say it, but bring on the correction.
When we bought banks were willing to lend us a million bucks on a just-over $200k household income. We politely declined and borrowed less than half that figure.
I expect there are a lot of young couples out there eating noodles in $800k houses. Want children? No chance.
Total household claims, which includes consumer debt, rose 5.5% year-on-year in May reaching $217.564 billion.
Business debt rose 6.1% to $86.214 billion and agriculture debt rose 6.4% to $56.074 billion
Oops - all sectors of credit extension rates above the nominal GDP growth rate.
by: Stephen Hulme
Oh dear if rio Tinto close up shop either power prices will drop dramatically or the power industry will be shown up as the scam it is. Either way the NZ public win but some rich mates of jk may lose. but luckily jk bought them a few years to sell their interests.
Here's your monthly BC totals for Auckland City from the start of the Housing Accord:
The Housing Accord specifies softer targets than these but these are the only one that matter. Not once has the monthly target of 1087 been met. Using Auckland Council and the government's own figures Auckland is definitely going backwards.
25,000? With auckland house prices going up cira $1000/week, in less than a month a foreign investor will have covered that cost of doing business.
Arent penalties supposed to be a deterrent?
That's all good but will John Key and the Parnell property association forget not to lobby, frustrate and prevent this great initiative ? I get this feeling National love the idea of gutting the RMA as it is true to their supply sider nature - but when push comes to shove they will ultimately resist because they are the ones who live in and own investment property in Parnell, Ponsonby, Epson, Remers, etc.
by: Keyser Söze
With the Auckland Council charging $100,000 to subdivide a section. $15,000 for a water connection from Watercare.
$25,000 for building approval fees
$10,000 or more for resource consent
Then 15% GST on all of the building materials and labour costs plus all of the council fees.
The cost just to get approval is out of control.
The unitary plan is getting established at a glacial pace, as its slowly revised, changed, watered down, reworked, sliced and diced. This process is providing no guarantee of the final outcome and no certainty for future planning.
Really? If this is true a name and number please so we can all take advantage of the best service in the industry at the lowest cost. Why would they, wait, they don't.
Haw haw haw ....our "social engineering" plans are working out so well ...keep them coming in say, what ! .....haw haw ....means we can reduce our labour costs and have all this filthy luka from these deeliteful 3rd world countries, to inflate the price into wazooland on all my existing leaky, damp, crappily built Awklund properties ..... haw haw haw.
Middle class .....whats that ? I hear you ask ....well our ilk don't want you! ..why pay you $28 per hour when my little buddies from the sub continent will do it for $14 !!
I must say ...it's all going "swimmingly" well ....pardon the pun...
I don't think any NZ'er would disagree with you there Spinach..........none of us want dirty money being laundered here!! If we have dirty money entering NZ who's job is it to detect that dirty money? Someone in a Government Dept has to know exactly what is going on......so they have either not done their job properly, turned a blind eye or taken a back-hander so we have corruption.
One thing that rarely gets mentioned is the fact the worlds populace has been getting wealthier so buying houses in other countries is likely to happen as people move around much more.
I know heaps of kiwis who...by: notaneconomist
Have heard negotiated rate of 5.74% floating on offer. Prob best to lock for 6 months by which time 4.5% for 3 years should be on offer. We are looking at lower rates for longer - no chance of any increase in rates for the next 3 years. NZ economy is heading back into recession.
The economy is like one of those ageing rockstars that just fell off the stage... http://goo.gl/e6JfKb
Remembering a Dilbert cartoon:,
Pointy haired Boss....Dilbert, put together a team to decide who will be on the strategy council.
Dilbert...You want me to form a committee to create a committee that will produce a document that will be ignored ?
Boss...No, it is a team to create a council>
The slacker employee.....Can I be on that team that ignores the document ?
When you are making record profits from capital gain why bother with tennants who might trash the place.
by: Mike B
National remind me of a school kid who's had seven years to do their assignment but decided to leave it 'till the last night. They haven't done the ground work, they are trying to bluff their way through with a C- but they just might find themselves with a big fat F and be kicked out of school.
Do you want to get serious?
Need regulations as from 1 July 2015 with 12 month sunset clauses that
1. Make interest on any purchase of investment properties non-tax-deductible
2. Freeze all foreign property purchases
3. Require all foreign purchases over past 5 years to prove source of funds
4. Freeze all citizenship applications subject to 3 above and 7 below
5. Close the door to migrants
6. Properties $1m & up, bought last 5 yrs by new migrants prove source of funds
7. Plus tax clearances from country of origin for all migrants subject to 6 above
Harsh I know - that's where it's at -...by: two otherguys