I guess it's a probability game. What are the chance that one day there will be an alteration to the rules surrounding property investment? Unless the answer is, never, then it's only about timing. Farmers in the '80's were given a last window of opportunity to change, though all the chatter, to see the changes in subsidies coming; Telecom investors were similaly given that 'talk' window re structural separation as a sign to get out. Seems there's a lot of talk about 'rebalancing the economy' going on at the moment. Another last window ?

Its returning to more normal levels after a horrid couple of years, much like the rest of the economy. Bit of a spring lift after so many end of the world predictions and headlines, the world hasnt ended but everyone has learnt a lesson to be more cautious in all aspects of their spending.

David: There was a programme on Friday night TV called "Harry and Paul" until a couple of weeks ago. It featured a regular skit on a secondhand shop called "I Saw You Coming". You wouldn't by any chance be from the related real estate agent chain known as "You Must Be Joking?"

Yeah it's funny Bill English seems a lot more keener on rebalancing the economy than John Key does, will be interesting to see which one gets their way.

I think English has closer ties to the farming sector, which no doubt is putting the heat on to keep the dollar down, which I suppose means...find other ways of cooling the economoy as well as just interest rates.
Which hike the dollar, and aren't really overly effective when banks just borrow from overseas anyway, which isn't subject to the RBNZ interest rates levels.

When I was covering economics as a reporter I would amuse myself and my fellow hacks by playing "market up/market down" based on pure whim in the newsroom. We could always find the stats to hang either storyline from quite easily.I've been flipping between the "green shots" stories, and glum old Stalinist stats like the Baltic Dry, spare capacity, foreclosure rates etc with increasing disquiet.
Somehow in our soundbite culture within a year of the "authorities", fiscal,financial, political rating agencies etc running the global economy to within hours of monetary Apocalypse the buggers have climbed back onto their Don Quixote steeds, reclaimed the ears of the credulous complicit media and are once again BEING TAKEN SERIOUSLY.
When you look over the scorched earth landscape of New Zealand's investment world for something to put your money into property inevitably starts to look alluring.
Who else can you trust?
At risk of sounding very grovelly Mr Hickey put it well to the opposition inquiry when he pointed out that the New Zealand economy is basically an oxymoron, that the reality is we have a huge property market with a few other economic clip ons for show.
Until we bite the bullet, regulate our Wild West markets, go into a common currency with Australia and stop being the world's tenth most traded currency/ plaything we will have no stability to offer investors, or exporters.
Property will keep looking good, purely because you can touch it, call it tactile investing, and the weasels of the property world will revert as they have this month to Price on Application pomposity.
Our crash is yet to come, when it does property values will be only one of a large banquet of woes that may even attract the gimlet eye of the Sainted Ambrose Pritchard.

Phil its not the NZ dollar its the US and the GBP and there is NOTHING english can do except of course follow Labours policy platform and collapse the economy.
No I am not related to any real estate agent, promise. I have lots of friends who are builders, plumbers, sparkys etc who have been hit rather hard by the property market collapse. A stabalization in the property market would be a welcome sign for them and their families, none would welcome a capital gains tax nor would their children and wives. Not everyone who benefits from a normal property market is a pillaging property speculator.

Amazing item on Campbell Live tonight about the collapse of the Irish economy and the devastated property market. Bernard Hickey features in the item comparing us with Ireland but says we have a strong banking sector whereas Ireland didn't.

Should be able to watch this item online on www.tv3.co.nz shortly

Just a little insight to this property spike-(here in Hamilton)auctions are all the rage at the moment.Most I have attended,have been a negociation auction with the auctioneer and usually 1 bidder,bidding against thierself!Maybe this is the end of the pent-up buyer spurt that the good doctor started back in April.

Most I have attended,have been a negociation auction with the auctioneer and usually 1 bidder,bidding against thierself!

sigh.

There was a phrase from the 70's show that nicely summed up those people who keep an auction going when its just them and vendor bids.

Combination of dumb and back passage if I recall rightly. Though the second word might have started with an "A"

Stop bidding. Let it get passed in. Then negotiate. If the property is passed in you can negotiate conditions...

Yes Philly, sums up my situation perfectly. I get sick of thinking about it. The status quo is just sooooo easy.........

I agree George. There is a wonderful sense of freedom that you can just "up and go" at the drop of a hat. I think if you like the house you rent, the rent is reasonable, the landlord is fair and stable, then there are worse situations you could find yourself in! Like, living in a house that you just bought, paying double out each week in mortgage/rates/insurance/maintenance, not liking the house a whole lot (downgraded from the place you rented), saddled with a wicked amount of debt, stressing out about interest rates going up and job security.....it's not that hard a decision really when I say it like that!

Nice sentiments, George, Veedub, Philly. Its just a mind thing. Once you detach from the need "to own" you can enjoy many benefits by renting. My old grumpy really enjoys not paying rates to the council.

Veedub - there is so much greed in the world, its so sad. And you can see evidence of it permeate through the opinion of some on this website
For some there is just never enough....

From what I can see the market in general is warming, but very steady - that goes for modest new houses and 1st/2nd home property. Trades people from all trades are seeing a steady amount of work come their way, but remain cautious. Architects in general are very busy. Valuers and even surveyors are a little less nervous with work starting to appear on the horizon.

Personally, I don't think there will be the decline in prices discussed on this site, and I don't think there will be a reinflation of a housing bubble.

I do see a lot of people content with a giddyingly high level of debt like I have never seen before, but they somehow seem to manage it.

It would be interesting to measure discretionary spending against debt levels - I suspect you will see money that was previously spent on discretionary spending now redirected to covering the higher levels of debt.

In short, I think it a bold move to sell your home in the hope that house prices will fall and you can re-purchase something similar at a cheaper price. In saying that, if you are disciplined, then saving a larger deposit and waiting for a bargain is certainly a wise move.

ruru - prices are going up - it's a fact. Those who sold and hoped to buy back in at a lower level when prices slumped would appear to have gambled and lost.

Matt in Auck, Philly, veedub appear to be getting rather annoyed that things have not played out in their favour. Get over it!

Bank Mgr: Hardly angry. Frustrated perhaps - that NZers & the govt seem to have this lemming-like death wish to keep borrowing from overseas & pour it into non-productive assets, thus dooming the NZ economy to further long-term decline. It is obvious that housing is not going to be the Light and the Hope for the future that people think, the demographic time bomb that is the babyboomer generation must kill that, plus the eventual need to halt the increasing indebtedness & start paying it back.

re your other point - yes, the house would be worth more now, but the purchasers have spent something north of $50,000 on it, adding rooms etc. It would be interesting to know wot it is now worth. The current rule in my city is that houses have usually being going for 80% of govt valuation. Maybe they have gone up a wee bit recently, I haven't heard of it.

re the others, Veedub, Kieran etc. Yes, our budget showed that the cost of rental would cancel out the income from our invested $$ (house sale money), plus we wouldn't be able to save any more (we pay the rental directly from income, not interest). However, have been very pleasantly suprised. Take away the cost of rates, insurance, maintenance & improvements that we no longer have to pay, & we are saving at a quite amazing rate. Plus we are free to go away any weekend at the drop of a hat, not tied up with wallpapering or doing up the garden.

So financially it is a no-brainer. Unless of course you are one of the believers that house price are starting another boom phase. Good luck to you, but don't expect sympathy (or a govt bailout) if it fails to materialise. & in return I won't expect the same if it does eventuate. Fair do's?

Regards

The Bank Manager said: "ruru - prices are going up - it's a fact. Those who sold and hoped to buy back in at a lower level when prices slumped would appear to have gambled and lost".

In theory it should have been a 'no-brainer'. Divest of property at an ebullient (indeed insane) peak and then buy back much later for far less, when sanity had returned. The problem with this is that the west (in particular) is now almost entirely dependent upon the 'wealth' begat of property. The individual depends upon it for his sense of financial well-being and the government depends on it because it is the vehicle that effectively delivers a sham economy - on which vast 'tribute' in the form of taxation can be plundered. So property 'prices' must never fall and even when 'Mr Market' attempts to cleanse the excess his righteous efforts are met with ever greater 'stimulus'.

It is the above that appears to be re-igniting property prices despite the underlying economic conditions - not least of which is New Zealand's astonishing level of borrowing. Did I hear $NZ400,000,000 per week? The great economist of the Austrian School, Ludwig von Mises, warned that there are only two ways a credit induced sham- prosperity can end. Either there must be voluntary abandonment and liquidation - or the derangement can press on to the point where the currency system involved is ultimately destroyed. Look at Pound Sterling and US Dollar and we may well be seeing the first 'cabs of the rank' in terms of currency system destruction. As always, New Zealand will not lead, it will follow, hence our 'basket case' economy is able to deliver a rising nominal currency that really just reflects the fact that it is CURRENTLY less of a dog than some others.

I am on record at this site as pointing out that the 'billion dollar' Kiwi home is by no means inconceivable. Moreover, the constant 'kite flying' over a capital gains/property tax suggests that our esteemed leaders are planning a coming hyperinflation where the expedient will exist to begin a process of 'property theft' to compliment existing 'income theft'. Those who have sold property 'hoping to buy back cheaper' may have made a mistake and perhaps they have been a little naive in thinking that Mr Market would be allowed to do his cleansing work. However, property 'perma bulls' beware. What is being done, by way of stimulus, is destroying this country's remaining capital and setting us up to be busted like Iceland and Ireland. At that point property taxes (and probably interest rates) will rise to surreal levels. Thus it may be the 'renter' who ultimately 'laughs loudest' - although there should be no laughter, only howls of outrage at the way the birthright of our children is being destroyed in preparation for the creation of an impoverished and authoritarian Gulag.

Well, I am not an economist, forecaster, money trader, stock broker etc. But judging by my own experinece, I've been looking to buy a home for us to live for the last 10 months. Everytime we found a good suitable house we made an offer, then about five or six other people had the same ideas and whole thing became a multi offers situation. Lately, good houses were sold within days of listing.. so the real news is housing market is getting hot.

It's not sub atomic science. It's just your normal market madness with a big fat helping of greed, idiocy, govt stupidity, humbug and human behaviour. Right now our govt thinks they can get by with a twist of pork and lots of spin. We will hear English blather on about the 6 part strategy and the need to rebalance the economy but it's just hot air. The National govt is dependent on porking the property madness to save the banks from a multi billion dollar collapse. The bubble is being kept alive like ebola in a test tube. No bugger wants to be held responsible for pulling out the cork to inject some acid. The virus will grow bigger and at some stage a bloody loud BANG will be the last sound the market hears.

The housing market in central Auckland is hot. Not enough stock to sell, very little construction over the last 18 months. Demand is strong and increasing. A lot of immigrants are buying properties. N.Z. is a very attractive bolthole, compared to some overseas destinations and a good place to park money. The NZ dollar is not going to collapse, in fact is probably undervalued. The export sector is doing o.k. albeit with constant bleating,as per the last 50 years.Greenspan fuelled a huge worldwide property bubble with 1% interest rates, what will happen with 0% rates plus printing. The u.s dollar carry trade is on!!

Bank manager: Yup, prices are going up. But where we differ perhaps is that I believe they will fall or stabliise by the end of the summer, at latest (there, I've stuck my neck out now). As a financial decision mr ruru and I have been seriously considering over the last week whether to sell fast (and we can) to take our considerable profits, buy copper or gold(thanks wally) and rent again for this summer, and wait. Next year we may or may not get a lot cheaper house but I think we'd get a better choice when the buyers took flight. But, I've got my fruit trees and veges in and it would be hellish disruption for the offspring when we're finally all settled, so it's no go.

Unemployment rising, interest rates at historically low levels, levels of personal and government debt twice as high as in 1929, the ratio of income to house prices roughly twice the accepted safe servicing level. Everything lined up 8 years ago and I think they are all turnung 180 degrees.

I don't think we are close to an inflationary period as yet. There is still alot of deleveraging to come. When inflation does arrive it will probably show in commodities and not in asset prices. The western world has been spending more than it earns for too long and eventually it had to come to an end.

New Zealand is a lovely part of the world but is not "Godzone" as so many of us seem to think. We have been insulated from the goings on in the northern hemisphere but we can't be forever. They are who pay us after all.

Hope for the best and plan for the worst thats all anyone can do.