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Black Friday home loan increases come from the Red Bank. Hikes range from +10 bps to +30 bps. Meanwhile wholesale swap rates fall

Black Friday home loan increases come from the Red Bank. Hikes range from +10 bps to +30 bps. Meanwhile wholesale swap rates fall

Westpac has chosen to be the next bank to raise home loan rates.

They follow BNZ who raised most rates. In BNZ's case it also raised floating rates.

But Westpac has not taken the opportunity to do the same.

The red bank however has raised its fixed rates by between+10 bps and +30 bps.

Its one year 'special' has been raiserd by +24 bps to 4.49%

Its two year 'special' has been raised by +25 bps to 4.79%

Its three year 'special' has been raised by +30 bps to 5.09%.

And its five year 'special' is up to 5.49%, a rise of +10 bps.

All its standard rates have risen as well.

These increases are effective on Friday 13, 2017.

These increases come even though wholesale swap rates have been falling each day this week. But they are higher over the past month.

Today's changes don't change who has the leading carded rates for mortgage borrowers. HSBC Premier still leads for a one year term, SBS Bank now has the leading rates for 2 years, and TSB Bank has the market-leading offers for 3 and 5 year terms.

See all banks' carded, or advertised, home loan rates here.

A snapshot from the key retail banks is:

below 80% LVR  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
  % % % % % %
4.25 4.99 4.59 5.29 5.45 5.60
ASB 4.49 4.65 4.79 5.09 5.49 5.69
4.49 5.05 4.79 5.09 5.69 5.79
Kiwibank 4.35   4.54 4.95 5.45 5.55
Westpac 4.49 5.05 4.79 5.09 5.69 5.49
             
4.39 4.55 4.55 4.89 5.39 5.55
HSBC 4.19 4.29 4.39 4.69 5.09 5.29
HSBC 4.29 4.45 4.39 4.75 5.29 5.45
4.25 4.45 4.49 4.69 5.10 5.29

In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

128 Comments

is this the catalyst to house price inflation slowing down?

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You'd think so, but reality will be the main centres still increase in price plus rents increase also. My question is, what will be the catalyst for civil unrest?

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based on what will prices keep rising? seriously... based on what?

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The fact the same reasons for price increases are still in place e.g. significant demand and short supply.

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Significant demand and short supply is a meme. The only reason demand is so high is because of investors.

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If every buyer with more than one house is classed as an investor then yes, but many of these 'investors' are buying a house for their kids 'cause they're worried if they dont, their kids will never own a home (in Auckland). I dont call that a meme.

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@hobo ........ quote: .... "but many of these 'investors' are buying a house for their kids 'cause they're worried if they dont, their kids will never own a home (in Auckland). I dont call that a meme" ..........

Yes, I don't call that a meme either, I call it a national disgrace.

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well, the point is that precisely with higher interest rates there will be less demand and the offer will increase since rental yields are lower and when prices stay flat or fall speculators cash out quickly.

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Net immigration of 70k and Chinese can buy here no restrictions. Everyone is trying to get the hell out of Dodge (Beijing)

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And they have cash and choose to live in Auckland.

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Surprisingly, not all immigrants are flush with cash.

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They need to raise their term deposit rates, as they are some of the worst in the market. I am about to move my deposits from them, as they are so low compared to other banks.

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What will you move your money to? Property?

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Just to other banks who have higher rates. Wouldn't put my money into property at the moment.

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All banks are so low. You're losing capital in real terms after tax/inflation. Are you going for short terms in the hope rates increase further?

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If the house prices don't fall at least 10% in Auckland in 2017 I'll eat my hat.

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This time next year you'll be eating your hat.

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I think you're right muntijaqi. Especially with Trump throwing his weight around the world stage. In fact I recon we're looking at more of a sales and price drop.

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Do you want fries with that ?

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Right time to move my mortgage! I'm not putting up with that's it's a joke!

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Its only just starting. Will be interesting to see what the reserve bank does. Their big lever is now broken. I.e. all they can do now is hope inflation back to its 'agreed target'.

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House prices are dropping and if we enter a crash the banks have to drop their rates to stay afloat. Trump is highly likely to upset China further and for the long term, so they're going to have to keep a hold on Capital flight and therefore the housing market will continue to drop.

Oh and here's the smoking gun of a favored method for moving money out of China that is now being watched by their officials: China crackdown sends Bitcoin sliding
http://www.bbc.com/news/business-38591929

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not sure on that more likely to call in the highly leveraged, bank wont care if only sells for the loan and wipes out the 20% LVR equity
happened before, will happen again next down turn

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Strange most other countries that were hit by the GFC have far lower mortgage rates compared to here?

Take HSBC as an example, their UK mortgage rate for a 2 year fixed at 80% LVR is 1.64%
http://www.hsbc.co.uk/1/2/mortgages/products?pcode=A0040473620000000000…

HSBC here is 4.39% for a 2 year fixed at 80% LVR?? So NZ three times riskier than the UK in HSBC's eyes!

I take it that it's due to NZ being far less developed and high risk, as our entire economy is dependent driving up house prices which is clearly unsustainable and long over due for a collapse, which I think we're starting to witness now!

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I dont see a collapse or a correction or a slight drop or even a leveling off.

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just to confirm - you're saying you don't see a 'slight drop' or even leveling off of house prices, really? Will this be because your eyes are closed or because you genuinely think it won't happen?

No, but really?

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Don't get me wrong, it would be great if houses in Auckland will become affordable for a family on the average wage, but I genuinely believe it won't happen.

No one on this site has put up a good enough case to show why/how housing prices in Auckland will even level off for the next few years.

It will take something extraordinary for it to happen i.e. opening up significant land, the Government building tens of thousands of houses a year for many years to come, and a change in policy for immigrants buying housing e.g. "Vancouver Tax".

Do you really believe that is going to happen?

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In simple economic terms, prices are a derivative of demand at that price point. While there will be demand for houses, there is a price point at which people will not buy - because the cost to service that debt is too high, and increasing.

I suspect we are (largely) at that price point. B&T data is showing the slowing pattern in terms of sales (the only true measure of house prices) ... that will only worsen.

All I know is that everyone in the history of bubbles has always said 'oh, but we're different'....

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Yes you're right MasterB and one of the biggest indicators of property prices increasing is the Auction listings and results. For the last four months Auction results for Auckland have been fairly terrible. Although some Estate Agents will try to convince you that a 30% clearance rate is a good results.

A good auction clearance rate is 80%, which is what was happening before the more serious Capital Flight restrictions that when in to force last November.

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I see a recent revival in Auction listings on trade me. Probably RE agents convincing sellers there will be an uptake after CNY, or have interest from buyers actually increased to warrant this?

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Well we'll see from the auction results but I suspect that you're right that it's the Estate Agents trying to drum up sales. They probably think that the recent hike in mortgage rates will send people scurrying to buy before they get any higher. I think they're deluding themselves.

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Even opening up land may not help. The roading infrastructure and public transport is so bad you may get a cheap house but who wants to drive for over 1.5 hours to get to work each way ? They are not making land closer to the CBD so travel times are just going to blow out. Housing close to the action and work is just going to contiue to rise.

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TRUMP is the hero we do not deserve.

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I'd say he was more of an accidental hero for NZ. What we really need it a Foreign Buyer Tax that both Canada's British Columbia and Oz have. I'd recommend a 20% tax duty on Overseas Investors.

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I loved how Trump called CNN "Fake news" yesterday.

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Why? Do you believe that CNN puts out fake news? I am really curious to know what you see in Trump that has led you to view him favourably?

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I believe CNN puts out fake and manipulative "news" all the time. The way they handled the unverified intelligence dossier alleging that Trump’s campaign was in direct contact with Russia before the election was shoddy. All their reporting last year was shoddy and they have lost a massive amount of faith and support. Everyone has an agenda and the mainstream media is not immune.

That said I support Trump because I believe his agenda is in line with mine.

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Your comment re CNN and manipulative news could be thrown at any news agency here, the US (watched Fox Lately ?) or just about anywhere worldwide. Al Jazeera wins in my book.

All that being said it will be the most entertaining social media filled presidency of the US thus far. America f@3k yeah !!

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Yes RT is good too. The main issue with Western mainstream media is that they seem to have taken it upon themselves to play the part of social justice warriors and report with a view to maintaining public harmony and keeping closely to politically correct guidelines. They operate much like the media do in authoritarian societies. I think this attitude is misguided and ends up doing more harm than good in the long run. Much like in the authoritarian societies the people ended up treating it like a joke.

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Except 'fake news' isn't socially just, nor maintains public harmony (in CNNs case it just stirs up strive and fear), nor politically correct.

The thing is in the most recent CNN case it wasn't even remotely fact checked, simple facts like names, dates, places where just incorrect. Real journalism at CNN is dead it seems, how could editorial staff let this happen> they should be fired. When news agencies just release lies without even checking basic facts they should be fined for such behaviour.

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Indeed, if they had a better understanding of social harmony they wouldn't be so quick to report fake news. I tend to be quite generous and view them as having good intentions but I am probably wrong. War and strife makes for good news.

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IMHO - How any 'professional news' agency can release completely fake news, (with glaring inconsistencies and obvious errors) the consequence of which would destroy someones reputation, character and potential business interests and you view them as 'having good intentions' is beyond my understanding Zachary. And the NZ media just parrot off such accusations without a second thought. Reporting of the truth seems a foreign language to many news outlets now days, I expect their ratings to follow their credibility down the toilet.

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To be fair, perhaps its a little of Mr Trumps own medicine coming back at him. He was a spreader of the birther conspiracy and the conspiracy about ted cruz' dad killing jfk... all the time saying "i dont know if its true i just read it and a lot of people are saying it" .. so, er a little hard to feel that sorry for him. He is mr innuendo

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Except Mr Trump is not a professional journalist and isn't running a major news network. IMHO to compare political speeches to professional journalism at major news organisations isn't quite the same thing. The journalist should be fired, their editor fired, their boss fired, CNN should be fined $10 million and barred from white house press conferences for 12 months. As a major news network they need to be made an example of.

While I'm all for freedom of the press to print the truth, printing totally made up trash stories isn't something a major news network should be engage in.

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No, not Professional in any way. Professes a lot, borrows a lot, in debt a lot, bankrupt a lot, denies a lot.

Will change the rules a lot.

But not to the advantage of a lot.

Except his lot.

I think that's the lot.

Happy New Year....we have a lot to be thankful for...if you do not owe...a lot.

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A higher standard required from a journo than a president, with nukes.... really? Actually The stuff wasnt made up by them anyway, they were reporting what was in another dossier, which is no diff to any news channel printing leaked docs. The docs themselves havent been proven false yet

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CNN was the crowd who ultimately leaked debate "questions" to Clinton. No other network came close to doing that. To suggest that didn't go to the highest levels of the organisation is naive.

The Katie Hopkins interview where she calls out the Clinton News Network is a classic also.

https://www.washingtonpost.com/blogs/erik-wemple/wp/2016/10/31/with-que…

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Yes, what part of 'the election is over and their candidate lost' does CNN not understand.

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Probably the more than 50% of voters who picked the other side

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I don't believe more than 50% of voters still believe the election hasn't finished. That's silly. Its over. They can move on with their lives and stop campaigning now.

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No, they know it's over, but if you think they'll let him get away with being Trump, you don't understand people

For the record - it's Trump who's still on the campaign trail. Watch his news conferences, his continued self promotion and grandiose statements. Not to mention the refusal to release documents that all other president elects have re: his business dealings and refusal to set up a blind trust. Wonder what the bookies have as odds on him having impeachment in first term? Might be worth punt :) Either way, he's an idiot and is followed by idiots and the only thing that works in the worlds favour is that he's all bravado and no action

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... and such arrogant judgemental factless rants is no doubt why in part he got elected, and probably why also he will win a second term, with his popularity now soaring in the USA.

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He'll be lucky to make it through one term.

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time will tell... if he can create millions of jobs (and a 2 trillion infrastructure spend up will go a long way towards that)... my guess is that he will surprise on the upside as many business leaders are now finding out.... I'm optimist about his presidency - I think the pessimism is way way over stated.... and things will turn out better than most expect.

If he can get health costs down, legalise many illegal immigrants, cut taxes for most americans and create millions of jobs he will be looking at rocking to a landslide win in 4 years...

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If, if, if, if, if. Just on health costs, how are you thinking they are going to go down, oh hang on, dump Obama care, replace it with nothing, people die, health costs go down, why didn't I think of that before?
He will tire of the position long before 4 years is up, if nothing else happens, pulling his head in will not go down well with him..
And on the infrastructure, where is the money coming from for that, surely not cut taxes?
I think you are dreaming.

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Heath costs in the US are just silly, I have friends in the US and can tell you story after story eg a knee surgery that in NZ would be well under 20k ended up costing USD300,000. I think you are dreaming if you think their health system is not broken and grossly inflated.

They will just borrow the money of course. Where else would they get that type of money from?

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They are just about the only major western country that does not have a universal health care system, do you seriously think Trump and the GOP will rectify that? For that they needed Bernie.

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He doesn't need to.
He just needs to bring down the cost for most americans, if you think this isn't possible I think you need to look into the ridiculous amount many pay. I don't know if he or the GOP ever promised universal healthcare - did he?

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On the infrastructure spend, Im not sure if you are aware that the US gov can just issue treasury bonds, it doesn't need to use any tax money. Eg most business people understand that if you borrow at 2.5% and get a productive boost of 7-8% they should just do it. The amount of debt isn't the concern - how much is actually employed to boost productivity rates compared to interest rates is what matters. Currently 40% of Fed debt is practically interest free as the Fed owns it.

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The news media is just another form of entertainment - treat is as such and you will be better off.

Read this link

https://www.bloomberg.com/view/articles/2017-01-13/pundits-facts-and-th…

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You are ignoring they are allowed to send out 50K USD per year per person. That;s more than enough to buy a Remuera mansion on a mortgage and a brand new Mercedes GLC

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You can carry more than $50k worth of bitcoin on a usb memory stick when flying out of China.

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It's digital you don't need to carry it across any boarder! And they're monitoring all of Bitcoin's transactions. Did you know that until recently 98% of Bitcoin users were from China.

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They're monitoring all Bitcoin transactions for everyone everywhere?

I understand how it works, but if I was nervous citizen of China, I wouldn't be buying over the internet from my home or office in China. As you know, USB memory sticks don't leave an electronic trail.

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You fundamentally don't understand bitcoin. Every transaction is on the public ledger (called the blockchain). It's actually easier to get money out with less risk and cost via HSBC (even with the 15% commission).

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big call. maybe you fundamentally don't know how to remain anonymous while transacting bitcoin....

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Well they're going to go on the high risk 'watch list' if they attempt to shift any significant amounts of capital out. If they can make Book Sellers disappear, I dread it think what they could do to those who flaunt their rules when they are serious about matters.

And remember they're not allowed to purchase overseas property, hence why our Auckland housing market is falling.

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I'm calling you out here CJ099, at the risk of 'sharetrader' calling for me to be banned from the site. Are you calling a 2.5% drop, falling? The start of the crash you've been predicting? This is a market where house prices have doubled in the last few years. I might remind you the same thing happened this time last year and prices have climbed rapidly till easing very, very slightly recently. In order for there to be anything approaching the "crash" you and the likes of sharetrader have been predicting, prices will need to droop below 2010 prices, which were depressed from the GFC, but were still higher than your average earner to afford. Prices need to drop back 60% to become affordable and if they were to do that, it would mean the world economy is in a far worse state than during the 2008 GFC. That would mean massive job losses and relative drops in earning by the people lucky enough to still have jobs. This by its very nature would mean people of average means would still not be able to afford property.
Further, if you just pop into a few rental open homes, you will see there is still plenty of juice for the investor.
My point is, I guess, that you are hoping something will happen that almost certainly won't, barring a catastrophe... which to wish for, is abhorrent.
Whether you like it or not, this is the new normal... most of us will live under the whim of our landlord or corporate landlord for the rest of our lives. This is NZ. This is your future

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@ blue meanie/ted stanton/john prentagast..etc etc etc

So in other words "avoid hangovers - stay drunk"

What could go wrong?

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actually matey... believe it or not I ain't those other chaps. (though I don't care if you do or don't) I've just heard you property bears calling the collapse of the Auckland property market since 2007. Well ten years on and the lot of you are STILL wrong...
I actually don't have a vested interested in which way the market goes. There is nothing my comments could do to sway the market one way or the other either... I am only pointing to the facts. Show me where I have been wrong? I sure can show you where ya'all have been wrong. It's okay that my comments sting a little, truth does sometimes. But keep your pecker up, it's Friday, have a glass of wine and just keep waiting for that crash... it may come eventually... but probably won't...

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Jeez Ted... you need to relax. You seem a bit feisty there?
Seriously tho, it's hilarious

ps/thanks for the advice - enjoying a cold beer on my Auckland deck right now laughing

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Am totally relaxed mvsgmt aka sharetrader aka mujii etc. Try break the mold old bean and think for yourself. Remember, just because you really, really, really want something to happen, doesn't mean it will. Or because you think something is unfair, doesn't mean it is. These are things most people learn in kindy. Enjoy your weekend. I'm going to.

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Great to hear you are relaxed - I can't help but feel you may have missed the point of this entire site - its opinions....

Nothing more, nothing less.

You accuse others of bitching and whinging on this site but do the same yourself from someone else's perspective?

Not sure what the difference is....?

We all have our barrows to push but somewhere in between lies the reality.

I own property and am a landlord so do not want a 'crash' - don't confuse that with my opinion that the current debt burdened, house trading obessed society we live in cannot be good for any of us long term when GDP per capita is flatlined and the debt is piling up.

Capitalism and conscience can co-exist.

Can I do much about it rather than express a written opinion?

Well I will vote differently for the first time in many many years, in my case based on immigration policy.

And I'm looking of how I can help my young children as the landscape for their future and home ownership in the city of their birth is now tenuous. In fact we may even consider selling and moving, not something I ever considered.

I know no more about what will happen than YOU do. We're all guessing and it's uncharted territory.

Fundamentals went out the window years ago.

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so I predict there isn't going to be a collapse and all manner of slurs come my way... so according to your comments, the spirit of this site is only one that agrees with your opinion. If you look a little closer at my 'bitching' comment, I was challenging someone to do a wee bit more about the situation then moan... one or two other people got my point. You accused me of being a troll... I've just been pointing out what is happening and the fact a 3% price fluctuation is hardly a collapse. Yes the fundamentals are long gone... that is why I maintain things will continue and back my opinion with 15 years of personal observation... personally I am looking at Morgan's and Winston's parties... I think it is terrible, people, hard working people are forced to pay most of their wage to pay rent... sadly our government has allowed it, nay encouraged it. But for all the comments on this site, the stats still show 60% of kiwis still own their own homes and for all the shaking of heads and tutting, they will pretty much as a group will vote National.
Perhaps my comments have been blunt and I will endeavour to soften them up a wee bit in the future.
That said, I find this site and comments a little depressing and will take a little break from it.
So bye-de-bye... have a fab week. Chur

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"Whether you like it or not, this is the new normal... most of us will live under the whim of our landlord or corporate landlord for the rest of our lives. This is NZ. This is your future"

That is also an abhorrent wish for our kids future. I have an interest in both outcomes, but passive landlords (i.e. unskilled mugs speculating) making a better living than productive, skilled and qualified members of society is a terrible set of circumstances.

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@ cmat - here here!

Well said

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I totally agree with you, it is abhorrent.What are YOU going to do to change it? Other than piss and moan on this site? Calling people names is probably not going to make the difference you hope it is... and if you've aimed that slur at me, you've missed the mark,,, by a long way. But facts are facts and all the whinging, name calling and dire predictions you and your ilk make, ain't going to change nada!

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Well one could change it by voting for the TOP party. Get the tax rort out of the sytem. That should change it.

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Indeed. A step in the right direction! I'm looking at TOP as well as Winnie...

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Ok Blue Meanie lets set you straight. Firstly, since you’re calling me out, I'd like to call you out too: Are you a Real Estate Agent or work in the property industry? Please answer honestly.

And to answer your questions:-

1) Yes a 2.5% drop is significant in a such a short space of time and yes this could lead to a property crash. Remember I've been through this before not so long ago in the UK, so I can recognise the signs. Basically I think the wheels have come off the Auckland housing market, I'll tell you why at the end.

2) Patterns: Yes you're right a similar thing happened about the same time last year. But why I hear you ask?
Answer: The NZ IRD regulations for Overseas Investors, this put most of them on hold, locking Foreign Buyers out of the NZ property market from October 2015 to January 2016, the Auckland housing market dropped by -8%. Once they had registered the Auckland market simply took off again.

3) This is not going to be a slight ease in the market, EVERYONE KNOWS that Foreign Buyers have dominated the Auckland property market for quite a while (From 2010 onwards).

We know that most of these buyers are from China, and it's not surprising considering the amount of pollution that they have to endure in the larger cities. And I fully sympathize with them as I'm also from a large city (in Europe) and being able to breath is a very basic human need.

Their economic industry success has come at a huge price, here's a BBC article to show you just how bad it is for them not surprising that they need to leave and who can blame them:-

China pollution: 'It can be completely dark'
http://www.bbc.com/news/world-asia-38538419

How China is trying to battle smog in its cities
http://www.bbc.com/news/science-environment-25631031

4) Why have the wheels fallen off Auckland’s property market? So what has changed to caused the sales and price drop in Auckland? Answer – Trump!

Trump has not been very diplomatic towards China (To put it mildly), casing China to very recently belt tighten, and drastically restrict their capital out flows. They’ve also realised that they’re loosing their population and therefore capital, mostly due to industrial pollution and they are now trying to combat this.

And from the results of Canada’s recent Foreign Buyer Tax mainly aimed at Vancouver, it’s really obvious to see how the property market shifted gear in to the other Canadian cities that didn’t have this tax.

Toronto housing extends surge as Vancouver slump deepens
http://www.theglobeandmail.com/real-estate/house-price-data-centre-cana…

You say it’s abhorrent to wish for a property crash. I’ve simply been pointing out all the signs that this market is completely unsustainable this has been building up for quite a while.

Once you decouple house prices from wages you’re teetering on a crash and therefore things have been pushed in to the property crash zone.

http://www.telegraph.co.uk/business/2017/01/02/fears-massive-global-pro…

See, Blue Meanie you’re so obsessed with house prices going up, you forget that these boxes actually need to have people to live in them, to pay the rent or the mortgage.

Theses extremely high prices are damaging NZ, Its created a false economy and has massively over inflated the dollar (NZD), having a negative effect on our vital industries.
Business are starting to fold now in Auckland due to it being far to expensive to operate here because of the high dollar and high cost of living, its making it very difficult to attract well qualified and highly skilled staff.

Now that Auckland's property market is falling this should help to allow NZ citizens and residents to afford a home and take the heat out of the dollar allowing companies to reinvest Auckland business.

Put simply; what Auckland needs is the Foreign Buyer’s Tax!

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Really NissanGTR? Are you sure your maths is right?

Fact check time :
> USD50k = NZD70k
> Mercedes GLC = 90k, or 1.3 people to send their funds
> Remuera 'mansion', let's say $5m (which isnt really a mansion either, depending on ones definition) , so to get a 20% deposit on that, they need 14.3 people to send their funds
> Interest only on the remaining $4m = $160k, so another 2.3 people would be required to service the mortgage (at int only)
So, unless there are 18 people going in on this deal, I am not sure it's 'more than enough' to have $50k USD allowed out per person. Or maybe 2 people sending it out for 9 years?
Notwithstanding that NZ banks are unlikely to lend to them based on overseas income.
Perhaps I have misunderstood your hyperbole?

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I was using hyperbole, I didn't mean an actual mansion, just a $1.5m house, easily sorted.

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OK, I'll be charitable ($1.5m doesnt buy much in Remmers) .... that's still $300k deposit (4.3 people) and another person still to pay the interest, no money left for that Merc.

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I'm not sure how true this is but I heard from a reliable source that you can take out more money if you state it is for living expenses. So 50K plus living expenses, travel funds, kids schooling, etc.

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Nope they stopped that too and will also put you on a watch list. Careful Zachary you could get your Clients in to serious trouble.

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Sorry but a "nope" is not very convincing. Foreigners are still buying up large in Toronto and are returning to the Vancouver market. What's going on there?
There is a bit of a flaw in your argument that agents support this sort of thing. If people have to sell their properties because of tight funding it is in the Real Estate agent's interest. They are interested in selling quantity of property. Doesn't matter if a few hundred grand is shaved off the price.

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Evidence please ( and don't comment that you are commenting one someone elses comment).

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Evidence concerning which bit? I posted links the other day about Toronto and the rising level of foreign purchases since the shock July tax in Vancouver. There were clear graphs.

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Zachary since you're an Estate Agent of course you'll want to keep people believing that the property prices will keep going up! I've already supplied several article links on Capital Flight and their enforced regulations, and David has also included them in recent articles.

And as BadRobot as already commented: Where is your 'evidence' that suggests that prices in Canada will continue to go up? The last articles links you sent me were pure speculation and out dated.

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When I supply links to data you say, "but that's in the past!" and when I provide links to expert opinion from those that are actually there you say, "that's pure speculation!".
It's a fun game I can play while I wait for the overseas calls.

The current situation seems to be that Toronto is still going up and that Vancouver has dropped ever so slightly however foreign buyers are still active and increasing purchases every consecutive month since August although not at pre August levels.

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This fresh from Bloomberg

https://www.bloomberg.com/news/articles/2017-01-13/ontario-is-becoming-…

While currently it is saying that Ontario is the last bastion of the hot Canada housing market it doesn't necessary follow that it will continue. All other market's Canada are either flat or negative.

The more interesting question is why does it matter or are you worried it is a proxy for what could happen in Auckland ......

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Thanks for confirming what I wrote earlier BadRobot. Of course I'm interested as I have quite a bit of money tied up in real estate. I would have thought you would be on my side in this argument as CJ099 was saying that house prices were falling rapidly in all these cities and I found out that in Toronto they are not and the others are kind of flat. I haven't been adamantly claiming that house prices will rise or drop in the future. Of course what happens in Canada and Australia will be significant because they are very similar societies subject to the same pressures.
You shouldn't get so upset about people's comments they are just opinions largely and shaped by an agenda we only see through a glass, darkly. That's why I like to know as much about a commenter's background as possible. With the writers of articles on Interest I often go to Wikipedia and study their history. It's a shame we cannot do that with commenters.

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All I'm really getting at in the end is most of these arguments are pointless and a waste of bandwidth - both computing and mental.....

Have a read of this article from Bloomberg as well.....

https://www.bloomberg.com/view/articles/2017-01-13/pundits-facts-and-th…

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Yeah but we thoroughly enjoy scoring points against each other. I would take you more seriously if you didn't always only call out one side in these "pointless" arguments. I suspect you have an agenda because of that. Also if you truly believed what you write you would spend your time doing something more valuable.

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No, my view's have changed. I also read one of the share trading forums and much of it is of little value but occasionally there are opinions on share trading strategy that are of value ( and I have never commented on that forum). I apologise if you think I am picking on one side of the argument - all I would like is some facts so I can make up my own mind ( if you call that an agenda - that is it - and that is why I put that Bloomberg link above). Likewise I would take some people more seriously if they actually provided facts rather than broad bombastic statements - it cuts both way.

If it is one thing that has been reinforced to me over the past few months is that absolutely no one has any idea what's going on..... ( no matter what we like to think).

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Zachary don't be so lazy, I've already posted in the reply comments to your Real Estate buddy Blue Meanie, in quite a long essay complete with links in the comments above. And I've already explained about the shift of Overseas Buyers from Vancouver to other areas that don't have the Overseas Buyers Tax, and Toronto is one of those areas.

And it is going to take a few months for the impact of the enforced capital flight restrictions from China to fully sink in globally, though there are quite a few articles that are already pointing out this high risk situation with cities such as here, the UK, Canada and Australia.

As I've pointed out earlier, if you completely decouple wages from the housing market you're teetering on a server property price and sales decline.

Having looked at TradeMe this morning it look like the sales decline trend is still continuing for Auckland.

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Where is your "evidence" they are going to fall?
I'm with Zack, like it or not matey, some people, a lot of people, have lots of money. Just because you can't imagine it, doesn't mean it's not real. House prices will not collapse, not here and not in Vancouver. What's my "evidence?" The last 15 years... and the continued up tick in Auckland and Vancouver house prices, despite the "fundamental facts" the nay sayers keep shouting...

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Where is your "evidence" that house prices are not going to fall. It's a pointless argument,

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Although the rate rises are only minor in the context of,things, wondering why the Banks are doing these slight increases when the swap rates are decreasing?

The Banks won't keep increasing rates if the swap rates are declining, can they?

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if at the same time they are reducing the loan book, (taking out high leverage) they will to maintain profits
WP have also stopped cash back, I expect ANZ to follow that policy next
ask around you will find credit is harder to come by, the banks are positioning themselves for a possible downturn.
will it happen who knows, but all are showing the signs of preparing for one.

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Presumably the RBA have taken them out to lunch and given them a good talking to.

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What you talk of runs the risk of becoming self-fulfilling - "they" can become the downturn

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The banks were the cause of the "upturn" because they opened the spigots on easy credit.
So, of course, if they are turning off the easy credit spigots then they will cause a downturn.

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The banks don't care - they do what they like. Swap rates are short term - they change daily - banks are looking long term - a year or more and what they have to pay for capital.

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They're also not stupid (despite appearances!) - they are positioning for increases in capital holding requirements, tighter lending conditions, funding constraints, increased risk etc etc all coming along this & next year. In my eyes when the majority of a country's banks start battening down the hatches and preparing for storms then its usually something to take notice of.

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rmnz - very astute comment...your'e dead right and I'm one happy to see it.

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The increases are simply not enough to slow the market to any great extent

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"Yet". However, banks stress test another 150-200 bps above these rates to test affordability, before they will make a loan.... I've meet RE agents who have told me this time is different and we will never see interest rates above 6% again, yet here we are and we could easily see this within 6-12 months... There are a lot of properties that make sense at 4-5% interest rates and modest to high capital growth (5-15%). Not so many with interest rates 6-7% and much lower capital growth (0-5%).

The market in Auckland has already slowed with increased LVR requirements for investors. The rest of the country is just playing catch up. If the Auckland market takes off again the RBNZ will make the LVR requirement 50% and the pressure will be to bring in DTI ratios.

If Labour get in they want to extend the bright line test to 5 years (making it a defacto CGT) and look at ring fencing losses.

All this against a background of rising interest rates.

The market probably will not crash (as that will require people on mass who need to sell) and I suspect few are highly leveraged due to the LVR restrictions in place already, and there is a growing pool of potential buyers with immigration running at record levels.

I think the double digit gains are over for Auckland this cycle. If the market doesn't pick up Feb/Mar it will only reinforce and entrench this as investors will not see the deposit for their next property created by just waiting for the capital gain.

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This is the problem - people are making all sorts of claims (interest rates will not rise is a long time etc) and yet interest rates are rising. Even the so called experts don't know. Trust any of them at your peril ( or with a big grain of salt). Assume they don't know.

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There is no such thing as an 'expert' on the future BadRobot.

People just don't know for sure what will happen in the future. Some predictions come true, some don't. At best it's a guess. Future predicting is unreliable.

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I think that is what I am getting at - but it doesn't stop people making predictions.....

EDIT - link to an article from Bloomberg

https://www.bloomberg.com/view/articles/2017-01-13/pundits-facts-and-th…

"2. There are no “facts” regarding most future events: This is an ongoing issue with those who try to anticipate what happens next. This is especially true when it comes to markets and the economy. These are complex nonlinear systems, easily disrupted by events. We exhibit a tendency to extrapolate in a straight line into infinity. Not only do we not know what is going to happen in the future, we often are unaware of the full range of possibilities. This is why extrapolation is a poor substitute for actual thinking."

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Neither extrapolation or actual thinking can give you the future clearly. It's all opinion and speculation. Some people will be right for wrong reasons, others with perfectly sound reasoning will get it wrong. Markets don't always behave rationally and neither do people.

No one knows for sure where house prices or interest rates will be in 12 months time. If bond markets get routed we could see mortgage rates 8-9% easy.

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Everyone knows we have no 'evidence' for the future. What BadRobot is trying to do is shut down the conversation, ie manipulate the narrative now so that the future will be different. For some reason he wants us to think we don't know so why should we care. We all know intuitively that this dumb.
We are all trying to influence the future. Our thoughts and opinions and selective examples of evidence about what is happening now or in the past are attempts to affect future events and outcomes. What actions we take now will affect the future there is no doubt.

For example I write that joggers should pick up litter as they work out because it is good exercise and makes the streets look nice and may help with property values at the same time. This is an attempt to change the future.

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We have tons of evidence for the future, it is called the past.

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Tell that to BadRobot, I'm sure he will disagree, however technically he is right. It cannot be classed as evidence, it is more like a trend.
Until recently it has been a good strategy to visit the US to seek out new business trends as they have tended to me twenty years ahead of us.

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But there is no historic precedent for what we are experiencing now?

The ongoing effects of the long term ZIRP and QE "experiment" employed on capital and RE markets globally is unprecedented.

It could keep going for a while, stagnate for years or deleverage badly.

Time will tell us all. Given up trying to work it out!

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Yes, we live in unprecedented times. Some property prices to average income have never been this high before. Does that mean they will crash? - not necessarily.

In my case I hope for the best but prepare for the worst, so its about risk management more than trying to work it all out and staying fixed on one point of view.

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While we think we live in unprecedented times, I am sure if you strip away the technology you will find we are not. The main thing is that human nature is exactly the same as it was in the days of the caveman. I think on our current settings we are headed toward conflict. We just haven't drawn sides yet.

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I am not sure why you think technology is what is behind the house price to income record ratio.
Yes human nature hasn't changed. There will be booms and busts, ups and downs, and my generation has lived historically speaking, relatively conflict free (I'm Gen X), we have missed WW1 and 2, Korea and Vietnam and the cold war ended. Maybe Russia, Europe and the US can get along, maybe not. I hope they genuinely do and give ISIS a thumping. I think the Euro is finished, its only a matter of time....

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I referred to unprecedented times. House prices only make up a smidgeon of that. Best you watch how China is tooling up.

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Maybe, but we have lived in extraordinary peaceful times. A bit of conflict isn't unprecedented at all, rather the exact opposite, more peace would be.

https://ourworldindata.org/war-and-peace/

I have friends in the military who tell me China is many many years away from being a match for the US, and they need the US (the largest consumer market) a lot more than the US needs them, would they really risk that over a few islands in the south china sea? for access to half trillion p.a. market for them? really? even if they won a battle victory they could still end up loosing and badly. Do you think they will risk that? Why would they?

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Pretty much they already are in the South China seas, do not be too complacent. Just because we are not seeing conflict here, does not mean the world is not fairly awash with it. We aren't the only ones here, and there seems to be a lot of jingoism around.

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And how does what has happened in the past help in predicting the future? Please explain it to me, I want to hear you pearls of wisdom.

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These are things I reckon drive the human race, need, greed, breed and power. They have never changed since we sat around in caves. We killed each other for the best cave, we outbid each other now for the best house, one way or another, those who cannot compete, perish. We try to change it, but we constantly seem to lurch back and forth between our more altruistic self and our old ways, and there are reasons that we do it.
You can even see the left and right political divide in it all. All you have to understand is round about where is human nature right now. We are in unprecedented times in a way, but we were when we first discovered how to control fire, so in another way, we aren't.
Winston Churchill said, those who forget the past are doomed to repeat it, but eventually we do forget it, we forget it because we no longer have anyone left who actually remembers it - as in WW2, say, and we start seeing there are people who are even trying to rewrite the truth of it.
Understand human nature and you will be able to see how history does repeat, even if it looks like something completely new.

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But that is not predicting the future - that is seeing a pattern that may or may not exist. While I agree about human nature - human nature is the spanner in the works.

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This appears to be one of your more inane comments. It's not a question of shutting down the narrative - it's a question of what you can control. You seem to think that by keeping the narrative going you can influence the future - this sounds like wishful thinking - and you can wish in one hand and crap in the other and see which gets filled first.

It is very rare for an individual's actions to change the future - influence the masses to change the future - maybe.

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