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Home loan affordability best in 4 years
The New Zealand Home Loan Affordability measure from interest.co.nz was largely unchanged in February as a small rise in the median house price offset the benefits of another fall in mortgage rates.
The pause in the improving trend for home loan affordability is not expected to last for long given predictions that house prices and interest rates will fall further later this year. Fresh tax cuts later in 2009 will also increase take-home pay and improve affordability.
Alex - I notice on
Alex - I notice on your graphics you have the term 'home loan affordability' as the title of the relevant data. Somewhere in between the original graph and your press releases this becomes 'housing affordability'.
I have been banging this drum for a wee while but there is rather a significant difference between the 2 terms. Witness this month when the REINZ says median went up $5000. Now when measured using 'home loan affordability' this is compensated by a drop in interest rates, so according to the definition you folks rather loosely bandy about 'housing affordability' stays the same. However lets say I am a fully cashed up non mortgage buyer (who needs no loan) - clearly to me 'housing affordability' just got $5000 more expensive.
The upshot of this? I really DO think you guys should restrain yourself to using the term 'home loan affordability' in all your releases as this IS what you guys are defining here (and you admit as much when you present the graphical data - after all you don't use 'housing affordability' to desribe the originator graph do you?). Your use of the term 'housing affordability' is imprecise (and more than a little misleading), though I dare say its designed to capture headlines.
Oh great, more spin to
Oh great, more spin to suck Kiwis in to more self-destructive behaviour.
Potential first home buyers should form an association now, and act in soldarity in refusing to buy until the median multiplier as per the Demographia surveys is down to around 3.0. That would soon get some sense into the market and into the whole development land supply issue.
A dollar of debt is still a dollar of debt.
USA: GDP $14 Trillion
"Total housing stock" at peak of bubble: $20 Trillion
NZ: GDP $180 billion
"Total housing stock" at peak of bubble: $ 630 billion.
DUH. What is WRONG with this picture?
If we don't have a big crash now because we had room to cut interest rates and keep the bubble pumped up, we are asking, begging, praying, to get it some time later.
Hi Andy, Fair point, it
Hi Andy,
Fair point, it is home loan affordability we are looking at.
Cheers
Alex