Up they go, who's next?.
The banks have failed to realise Bollard gave them a signal that he has given up all hope of seeing the useless govt do something, anything, to throttle the property bubble. The banks have been handed the keys to screw whatever they want from the fools sucked into the bubble and that includes pushing mortgage rates up past 10%. It's been a mexican standoff between the useless govt, a weak RBNZ and the masters of the economy, the banks. Guess who has won?

@ grapar

I think Wally was one of those who exchanged his place for a bundle of $$$ at the peak of the boom and started gloating about how clever he was. Trouble is governments around the world are printing $$$ as fast as they can. Never yet seen a machine that can print houses. Wally is getting increasingly frantic as his strategy is looking slightly wobbly at the moment. My guess is that after agent's commission, moving costs, rent he would be hard pressed to buy into the same house and come out ahead. Some kind of irony to hear people who speculated on the falling RE market bleating for the government to step in and sweeten their position.

lol

Pete/Paul , you dont get it... Money is an official looking promise on a square of paper, But Value still equals Value.

A Cow still = a cow
A tonne of Copper still = a tonne of copper.
A barrel of Oil is still way cheaper than getting out and pushing the family down the road to supermaket where you get to exchange even more paper [which can grow at a way greater rate than any of the above] to buy food.

Wally, the tragedy is that rationale decision making is impossible because, as mouse has correctly noted, money is merely a promise - whereas value is value! Within this I have long held to the view that house values will fall - whilst house prices can be anything you want them to be. The best illustration of this is to measure the price of property against gold and, if I recall correctly, we are now back to house prices at levels not seen since the 1970s when this formula is applied.

I think the essence of a good decision is that you are comfortable with it, and I am also minded that my own 'hyperinfltionary hypothesis' is only that - a hypothesis. I also acknowledge that the underlying financial pathology is deeply deflationary, and it may well be that it proves impossible to deliver the reflation that vested interests are seeking. Within this the veteran Elliot Wave Theorist Robert Pretcher provides some highly compelling arguments and it would be careless to dismiss his thoughts. As a renter you may yet have 'the last laugh'.

The property 'perma bulls' should also take time to reflect. A new 'boom' would deliver a wonderful expedient for ever more voracious property taxes - and the problem with property is that you cannot slip it into your pocket and move on. It is stuck to the ground and the government knows this only too well.

As to Ireland its a great pity to see what is happening - especially to a people who have shown such courage in voting against the reprehensible EU Lisbon Treaty. Can't help thinking that this is one of the key reasons for the harsh financial treatment they are now receiving. Good luck to them!!!

Rod, since December 1945 a barrel of oil has risen 64 times in $US terms. However, when measured against gold its price has remained essentially unchanged. How can this be? It is, of course, because the purchasing power of the $US has been destroyed over this period due to massive over-issuance. In terms of house prices interesting analysis is available from the U.K. where we can see the average house price requiring around 300 ounces of gold at the end of April 2009. In 1970 what did the average U.K. house price fetch - around 300 ounces of gold!

The fundamental mistake you are making is to believe that fiat money (U.S. Dollars, Pound Sterling, Kiwi Dollars etc) represent a constant against which value can be measured. In reality such currencies, since they now have no connection to gold, can be issued in unlimited supply - thus depriving each unit already in circulation of progressively greater value. Why do you think the Germans attempted Operation Bernhard in World War 11. Because they knew that by flooding Britain with counterfeit money the purchasing power of Pound Sterling would be destroyed.

I have never disputed the potential of house prices to stabilize. Indeed, I think I am the only poster on this site to have suggested that the billion dollar Kiwi house is entirely conceivable. Is property a good 'investment' - probably not because it is generally a non income producing liability that decays and is subject to ever more onerous taxation. Is it a good hedge against monetary debasement - probably yes because progressively more pieces of paper, that describe themselves as money, are going to be required by any vendor before he hands over the family home. What was it that John Maynard Keynes observed - as the great 're-inflator' on whose economic ideas todays property 'perma bulls' repose their hopes:

"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth".