Here's some thoughts for you all...

I had lunch with an economist friend today. He said the following to me, which as a non-economist seemed to make sense.

"Median house prices will definitely fall further. Because of the lack of new house building consents issued in the last 12 months, there is a lack of new build housing stock coming onto the market. Because a brand new 4 bedroom house will usually be significantly more expensive than an older 4 bedroom house in the same location, this lack of new builds hitting the market will only result in median house price drops. It is only from about now that we will start to notice the lag effect of low new house numbers hitting the market, as there is usually a 8-10 month lag between the time building consents are issued and the houses hit the market (for the obvious reason that it takes time to build a house). So the very low building consent issuances seen from middle of last year will only now start to be having a true effect.

At the same time, apartments have been a proportionately higher component of building consents therefore the average value of new builds sales will be lower.

Whilst some economists have argued that the lower supply of new housing hitting the market will push prices up in the face of rising demand, I am of the opposite view as I think the demand side of the equation has been overhyped. Houses that sell will be of lower value because proportionately they are made up by a greater number of older homes. Throw in the increasing number of mortgagee sales, typically lower end investment properties going on the market, together with the exaggerated talk of booming immigration, and rising unemployment and a depressed dairying and tourism sector, and I can definitely see house prices falling following this false start"

Well that summarises what he had to say. Any thoughts????????

Yeah Matt in Auck, you forget the govt has a secret weapon! It comes in the form of a family loaded with foreign capital and happy to pay top Kiwi$ for the overpriced farms and properties in exchange for NZ citizenship rights and John will throw in a Knighthood or three if the pile of loot is big enough.