HOT TOPICS:   Migration  |  Mortgages   | Inflation                                                RESOURCES:    Economic calendar   |   Down paymeny calculator

The comment stream

Reader poll

In your opinion, what's the last thing someone should borrow money to pay for?

Choices

Join the Interest community to be a registered commenter so you can:
- Edit your comments
- Avoid the CAPTCHA
- Vote on comments
Register Here

Already registered? log back in here ..

Forgotten your password? No problem! Click here

Opinion: Historical figures actually suggest the current surge in Auckland house prices represents a period of 'catch-up' on other regions

Posted in Opinion

By David Hargreaves

The trouble with statistics is that they often don't perform as you expect, which can be mightily inconvenient.

Your writer sat down armed to the teeth with facts and figures, determined to sculpt a piece of prose that definitively underlined how the Auckland house market is continuing to roar ahead of the rest of New Zealand, leaving it in its dust.

But he decided not to do that, because that's not actually what historic data suggests.

Certainly, to go by current figures, you have to say the Auckland housing market is on a bit of a tear.

And people are lining up to give out the most dire warnings about what might happen if the housing market, and that naughty Auckland in particular, continue on their merry ways. We've had Reserve Bank deputy governor Grant Spencer, Finance Minister Bill English, Prime Minister John Key, international credit ratings agency Fitch Ratings, and fellow ratings agency Standard & Poor's all queuing up to have a pop. And I have a feeling I've still left a few out.

But we get the message: House prices, particularly those in Auckland, are rising too quickly. This might lead to inflation. It might lead to trouble for the banks. And either or both of these would be bad.

So, let's bring in some of those statistics. The house price figures used here are those compiled by the Real Estate Institute, because those are undoubtedly the freshest ones, giving the clearest steer to what the market is doing right now. To compare apples with apples the historic figures quoted here are also sourced from REINZ data.

In the past year to March the national median house price has jumped NZ$30,000, or 8.1%, to a new record high NZ$400,000. But of course that national median includes Auckland figures. And those were spectacular, with the Auckland median gaining 13.5% to a new high of NZ$562,000.

The earthquake-affected Canterbury figures were nearly as impressive, up 12.2%. Elsewhere, frankly, it was all a bit cold coffee, though some of the traditional warm spots such as Nelson were showing signs of life. But several areas had median prices virtually unchanged from a year ago, while Northland prices were actually down 4.8%.

So, Auckland is definitely hot right now.

Okay, what about if we take a slightly longer view?

The peak of the last housing boom was 2007. For ease of comparison, we'll take the March 2007 figures. For most of the country these represented prices that were close to but not actually at the peak.

Auckland soars

Compared with the March 2007 REINZ figures, the Auckland median house price is up some 26.9%. Yes, that's right, houses are changing hands in Auckland now for about a quarter more than they cost at the height of the last housing boom (or bubble). This compares with a national median price (although remember that includes Auckland figures) that is up 16.4% over the same period.

Elsewhere it is much more of a mixed picture. The Canterbury figures are again strong (up 19.7%) as they are in Southland (up 32.2%) - though it is worth noting that there was a fair bit of "lag" in Southland, with the area enjoying a momentous 21.3% gain in prices in the 12 months to March 2008 at a time when prices elsewhere were flattening and indeed starting to drop.

Since March 2007 a number of regions have achieved just single digit percentage increases in house prices, while Northland again is slightly down.

As some point of comparison, the Reserve Bank's inflation calculator suggests that NZ$1 of first-quarter March 2007 money would get you NZ$1.16 worth of goods and services as at the end of 2012 (which is as far as the calculator goes).

During that period there was a 13.6% decline in the purchasing power of your dollars. So, in other words house prices in Auckland, Christchurch, and Otago have been ahead of the game; elsewhere, no.

Auckland dominating?

So, the picture is clear. Auckland house prices are dominating the market and pulling away from the rest of the country. Yes? Well...

Let's go back to 2001, pretty much the start of the last housing boom.

Any assessment of how price movements compare from region to region has to be done on the basis and with the understanding that they didn't start out equal, unless you go back to the Ark, but REINZ records weren't around then.

So, what you do have to accept is that house prices in Auckland and other major areas were higher than regional areas in 2001.

The Auckland median in March 2001 was NZ$248,500, compared with Wellington on NZ$190,000 and Canterbury/Westland on NZ$149,00. The lowest median was Southland on NZ$85,000.

Let's look at what happened over the next six years up to March 2007.

Well, Auckland prices rose a pretty damn impressive 78.3%. Very nice. Our Reserve Bank inflation calculator tells us that in the relative period the cost of goods and services increased 16.3%. So, no worries about being ahead of the play there.

What about elsewhere? 

Taranaki hot

In Taranaki, the median price shot up by a gobsmacking 148%. Waikato, Nelson/Marlborough, Otago, Canterbury, Manawatu/Wanganui and Northland also all enjoyed 100% or better increases. The national median rose 97.6%.

Yes, Auckland's increase, impressive as it was, was well below the national increase.

If we then stretch these price comparisons from March 2001 to March 2013 we get that in the 12 year period Taranaki has seen the biggest increase in median price of a truly splendid 176.2%.

Next comes Otago, up 159.8%, Southland, up 144.1%, Canterbury/Westland (140.9%), Nelson/Marlborough (129.3%), Auckland (126.2%), Manawatu/Wanganui (119.3%), Hawkes Bay (116.9%), Wellington (107.6%), Northland (104.8%) and Waikato/Bay of Plenty (103.1%). The Central Otago Lakes area wasn't separately broken out in 2001.

The national median increased by 130.1%, so Auckland lagged again - though not by much.

And if we put our inflation machine on the job again to provide some cost-of living comparison, we get that there was a 25.7% decline in purchasing power during that period with NZ$1 in first quarter 2001 now getting you NZ$1.35 worth of goods and services.

Only middling

So, what we have in that 12-year period is Auckland only middle of the pack in a list of frankly, pretty impressive, house price rises.

Okay, well the argument is obviously going to be that "it costs way more to buy a house in Auckland than it does in Taranaki".

Yes, it does and has done for as far back as this observer can remember, and that is rather too long for his liking.

The interesting thing then is to look at how prices have tracked relative to each other in recent history. Let's examine that 12-year period again.

In March 2001 the Northland median price (of NZ$146,500) represented 59% of the Auckland median (NZ$248,500). By March this year that percentage had slipped to 53.4%.

Waikato/Bay of Plenty went from 64.4% of Auckland's median to 57.8%.

Hawkes Bay moved from 52.3% to 50.2%.

Manawatu/Wanganui went from 42.7% to 41.4%.

Taranaki went from 42.3% to 51.6%.

Wellington went from 76.5% to 70.2%.

Nelson/Marlborough went from 60.4% to 61.2%.

Canterbury/Westland went from 60% to 63.9%.

Otago went from 38.3% to 44%.

Southland went from 34.2% to 36.9%.

So, we have seen areas such as Wellington and Waikato/Bay of Plenty lose a lot of ground on the Auckland housing market. But actually five of the 10 regions gained ground in percentage terms on Auckland - albeit from a very low level in the case of places such as Southland.

And the national median? It actually gained on the Auckland figures (which again confusingly make up a large part of it), rising from 69.9% of the Auckland price in March 2001 to 71.2% in March this year.

Statistics a problem

Obviously the problem with statistics is that they can tell very different stories according to the timeframe involved, and the way in which they are applied.

All I can say is that I started comparing these figures for the past 12 years with a view that they would show the Auckland market leaping ahead of the rest of the country. The figures, at least in that period, don't show that.

They do in fact indicate that Auckland lagged a little during the ranging bull market of 2001-2007 behind many parts of the country. So, recent gains could be construed as Auckland doing a bit of historic rebalancing of its leading place in the national house price structure.

Does that mean there isn't a problem with heat being generated in Auckland? No, it doesn't mean that. But it does indicate to this observer that the likes of the Reserve Bank do have a little time to see how the market pans out before rushing into any action such as higher interest rates.

Some economists are suggesting that the Auckland and Canterbury house price rises will now start to be replicated elsewhere in the country as indeed was the pattern from 2001 onwards.

There probably still is time to see whether that really does materialise.

Widespread increases

I do have doubts that we will see the kind of widespread price increases we saw in 2001-2007, given that at the moment the appearance of a strongly rising house market nationally boils down to the highly unusual situation in Christchurch and both a real and increasingly strongly perceived (IE people are panicking about it) shortage of houses in Auckland. It does seem possible that Auckland may yet lose some heat and momentum of its own accord.

Mortgage broker John Bolton is already suggesting the Auckland market may be peaking.

But in any case, there are things that could and should be under way to tackle the Auckland situation. This observer will in a day or two have a go at some suggested solutions.

In the meantime, however, right now, the Auckland housing market isn't perhaps quite the runaway rocket ship that it might seem. That is not to say that it couldn't become that if there isn't some action.

This article was first published in our email for paid subscribers. See here for more details and to subscribe.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

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.

37 Comments

David, the historical figures

David, the historical figures are
Mt Albert - 2 NEW HOUSES, corner alotment. Next to station 725 pound ($1450)

Auckland Star Wednesday October 2 1907

A basket of goods and

A basket of goods and services
that cost £725.00
in quarter 1 of 1907
would have cost 

$112,745.49

in quarter 1 of 2012
 
 
Given the REINZ median for Mt Albert is now $730,000 that would have been a better investment than other stuff

Not everything is going up in

Not everything is going up in price.  In the late 80's my dad bough a 26" Philip K9 colour televison.  He had to be on a 3 mth waiting list at LV Martin (Wellington) and cost him a cool $1200 in those day.  Now you can pick up a 26" TV for couple of hundred bucks.

Indeed - $399 for a 39 inch

Indeed - $399 for a 39 inch flat screen at the warehouse!

Yeah but the Philips K9

Yeah but the Philips K9 probably lasted decades showing 2 channels of excellent programming and no adds on Sundays (Magnum PI, Dukes of Hazard, Chips etc.) wheres the Warehouse TV probably has 40 channels of crap, mostly advertising and will only last 2 years.

Commercial 1/4 acre Princes

Commercial 1/4 acre Princes St Dunedin 35,500 pounds in 1885 sold as land value. (ODT 13/1/1885)
 
Same site 2010 LV $948,000.
 
Inflation for the period (125 yrs) about 3.7%PA, ie should be worth $7m!!  Does that make me think we are on the cusp of a 600% rise in land prices - NO!!
 
Moral:  price growth depends on location!!  Historical comparisons are meaningless viewed in isolation.

Chris_J, exactly right.

Chris_J, exactly right. property bubble? what property bubble? Looks more like negative real growth in most of New Zealand. Sometimes I feel like I live in Twilight Zone, things in New Zealand move at slow motion.

Good cherry pick. In 1885

Good cherry pick. In 1885 Princes St was the centre of town in the most vibrant and fast growing city in the country. Then the gold boom bust and the CBD gradually shifted to the Octagon and George St. I haven't been down Princes St in over 15 years but it was rundown shops and dilipated warehouses the last time I looked. 

I'll add that the site had an

I'll add that the site had an 8 level office building built on it about 1970 and is still at the heart of the Dunedin CBD, between the Casino and Octagon.

It's still a relatively prime location but the value reflects the relative decline in commercial activity in Dunedin.

 

Of course on top of that £35,500  land price, the buyer (Government Life Assurance) spent about £100,000 building grand neo-classical offices for themselves which incorporated imported granite steps and columns.  So £135,000 in 1890 or so ($270,000), has effectively (since it was voluntarily demolished in the 1960s) only increased to $948,000 today!!  Inflation would have increased £135,000 in 1890 to something close to $30m today!!

 

By comparison cottages in Ponsonby were worth as little as £50 (roughly $10,000 today) up to about £500 for a more modern but modest villa (about $100,000 today).

 

Perhaps all this shows is that the inflation of a basket of goods does not represent what happens to specific assets very well at all.

This article misses a vital

This article misses a vital variable. Days to sell. Not much point buying an investment that has a difficult exit strategy.

Nice article. Always good to

Nice article. Always good to see someone putting actual numbers to work.

 

Keeping in mind a general approval of the article, I would make the point we are probably not looking at a pure linear relationship- there is a price that the market is steadily less able to pay, so the ability to increase is capped by various factors (so for that matter is the minimum, unless you live in Nightcaps).

 

You can use multiple series for going further back, but would need to match the sets to the crossover periods in common, which is way to much work for a blog post.

 

Given that the average median of the non-Auckland regions is -3%ish relative to Auckland for the period, but the national median (including Auckland) has gotten closer to Auckland, I would interpret that as the national medium price is more influenced by Auckland than other regions over the period. Two possible reasons are that there have been proportionately more sales in Auckland than in other regions at the end of the period, so dragging the national median towards Auckland, or that the regions showing big gains relative to Auckland are making up much more of the sales figures. Either option boils down to areas with dropping/ stable prices are selling less houses in the period.

 

While the census figures are not out yet (so I can't work it out easily for myself), when the figures are out I would be really interested to read an article that compared each regions increases (or decreases) compared to the change in population of that region, as shifts in that ratio should indicate some measure of price vs. underlying demand- the properties that have shifted relative to the change of population should be evidence of regional bubbles. 

New Zealand house prices

New Zealand house prices 2001-present have been completely decoupled from population pressure.
I can say this with a fair amount of confidence as I found the regional population estimates at Stats New Zealand.
http://www.stats.govt.nz/infoshare/Default.aspx
Taking the percentage population increase in each region (2001-2012, as that was what available) and comparing it to the percentage price increases provided by David in the orginal article, there is no relation between the two. I even waved a graph at my 14 year old daughter and asked "what does this graph tell you" and got a response of "there is no correlation".
From this I will say whatever has been driving house prices over the last decade, it is not fundamentals.
For those wanting to repeat the steps the figures for population were Taranaki increased 4.2, Otago increased 12.2, Southland increased 1.7, Canterbury/Westland increased 12.1, Nelson/Marlborough increased 11.7, Auckland increased 23.7, Manawatu/Wanganui increased 2.2, Hawkes Bay increased 4.7, Wellington increased 11.3, Northland increased 9.7, Waikato/Bay of Plenty increased 12.7
 

Olly will be proved right ie

Olly will be proved right ie Auckland house prices will double in 10 years - they have already increased 30% from the recessionary lows and will only continue to climb as government delays the unitary plan and holds back the construction of new homes with its restrictive Reseource Management And Building Acts.

The blather from Key,

The blather from Key, English, Wheeler, the IMF, et al about house prices and inflation.....all par for the course....now they can sit back and leave the bubble to expand right through to the election...no blame...the peasants were warned...blah blah blah.
In the real world fewer peasants are buying new houses...fewer are being built...the demand for existing homes hots up...no gst theft there...no handout to council...and the banks are pumping the credit sale...debts going up.
Just another episode or two in the sorry financial farce that is the NZ economy. Owned and operated by the big banks.
 

Great Article David.  And I

Great Article David.  And I also think it's good to see analysis and use of source figures.  Well explained too.  It's a complex scene, so deserves a complex think.  I will have to get out my jotter pad and pencil as I go throught this article again.

Another factor in Auckland

Another factor in Auckland prices , since 2007 is the new wave of speculators... value added.
Picking up homes in need of a new kitichen, carpets piant etc, say 25 to 45K then ficking off at a comfortable net profit...
The number of houses being turned over with healthy increases within a 6 week to 6 month period started around mid 2009......and account for over 1/3 of all sales in the area I have been monitoring.. (address sale price and in many cases asking price) since 2006
Many of these are being picked up by landlords, or often kept as rentals...upgraded premises increase in rents....these are not a quick flick do up, but more serious landscaping, carpets, stoves, kitchens, bathrooms, adding extra bedrooms, on suites etc.
Turn a 2 bed into a 3 bed, or a 3 bed into a 4 or 5... huge difference to sale price and rent.
Along with increase in rents comes an increase in income brackets
the other noticable changes has been the change in the social structure of small areas within the monitored area....rents now far higher due to the upgrade of the premises, and over upgrade of the areas...this could also be partly reflected in crime figures dropping... general area, streets and shopping malls being tidier, marked decrease in tagging.
And is this just speculating as in the 2000/ 2006 boom?  then it was simply pick up a house keep for a few weeks or months , maybe a quick flick of paint over the dirt and re sell. This time it is serious value added... and with value added comes builders , plasters, painters, electricians and plumbers...even roofers....employment
"Obviously the problem with statistics is that they can tell very different stories according to the timeframe involved, and the way in which they are applied."
And there is a lot more when one moves from a desktop of stats out into the real world to observe actually what the market is doing...or simply maintains a record of actual addresses and sales/ re sales over many years to identify the real anomlies the overall means stats throw up, rather than simply take them at face value and draw incorrect conclusions.
Add the conclusions of the further in depth research of the artucule to what is/ has been happening in the market (33% + of it) and a very different picture emerges.
 
 

For all the bandying of

For all the bandying of words, the fact remains that Auckland house prices are ridiculously expensive, as they are to a lesser extent in the rest of the country.  Comparing ridiculous with lesser ridiculous is pretty meaningless.   The market remains corruptly rigged and for all the rhetoric nobody is doing anything about it.  I was in the Chicargo/Illinois area last week;  2200ft2 house in good condition on a decent lot for sale for $75,000.  Some countries have a free market.  We sure do not.

I have thought about buying

I have thought about buying property in the USA and I believe a lot of New Zealanders have bought in the USA borrowing the deposit from New Zealand to go into a US property. My problem with the US is that they use a Deed system of ownership which means that if you buy a property you have to prove the correctness and accuracy of a chain of deeds. If there is any errors or ommissions or fraud in anyone of those deeds, the loss falls on the purchaser. In New Zealand we have guaranteed certainty using a Torrens system of registration. Once title is registered, the purchaser is virtually guaranteed of ownership ignoring any ommissions or errors or fraud in any previous owners.

Spoke to an Indian chap

Spoke to an Indian chap today. He confirmed buying 3 properties in USA recently. He borrowed from his existing property in Auckland to invest in the USA. Rental returns 15%. There you go. It is actually happening. We cannot look at household debt in isolation to the overseas assets that New Zealanders hold....and panic like little school kids. I get this feeling that we have school children running the Reserve Bank.

There are some awesome houses

There are some awesome houses cheap nearIllinois. Need some TLC though:
 
http://au.businessinsider.com/abandoned-homes-in-detroit-2013-3?op=1#-1

I think this may be the

I think this may be the result of the uncertainty in the owneship titles. If any deeds are lost in a long chain of ownership, any potential purchaser faces the risk of losing the house. Why would you pay for a property and undertake repairs if the ownership is uncertain.

I've got probably a different

I've got probably a different perspective on Auckland property having travelled a lot before settling back down here.  Having lived in many western countries I can say that pound for pound Auckland property is very cheap by international standards.  If you went to NY, LA, London, Melbourne, Rome, Tokyo or just about any other major western city on earth then you would start to understand the term expensive.  If you went into a real estate office in Sydney and said you wanted a 3 bed detached house on a quarter acre section within 30 minutes of the CBD for $600,000 you'd be laughed out of there (you can still get that in Auckland). 
 
Most city people don't live in detached houses with big back yards!  They live in flats, terraces and apartments and these are the property types that Aucklanders are going to have to get used to. 

Exactly, Auckland is cheap. I

Exactly, Auckland is cheap. I have travelled widely and I have found Auckland properties very cheap in comparison. The problem is a lot of people compare Auckland which is the lead city with something in the middle of timbuktu or wop wop land and say we are expensive.

You are not compare like for

You are not compare like for like.  Basically you are comparing a Ferrari against a Corolla! in term of features and values for money.. of course the Corolla is better in value. 
Auckland should be compared against cities like Brisbane or Adelaide..  it's expenisve when comparing to Brisbane IMO.

Exactly, they must have

Exactly, they must have travelled with a tourist overview to even consider the comparison, world profile, perceived desirability,variety of options in lifestyle, population and wealth concentration/generation ability is at a totally differnt level in the cities they mention than Auckland. All reflected in property prices.

Hi David,   Something you

Hi David,
 
Something you haven't mentioned in the article is the 'composition effect' of apartments. What I mean is, the most common properties for sale in Auckland and Taranaki in 2001 would almost have been free-standing "family homes" on reasonable sized sections.
 
In 2013, the most common properties in the Taranaki would still be free-standing "family homes" on decent sized sections. But in Auckland the composition of the market has changed. There are, relatively speaking, many more apartments being sold. They tend to be sold at much lower in prices than other residential homes, so the trend in an 'average' Auckland price is being pushed lower than would otherwise be the case. Wellington's comparatively weak change in price over that 14 year period will have the same factors as well.

Brisbane or Adelaide are wop

Brisbane or Adelaide are wop wop land as far as cities are concerned in Australia. What are the universities there? University of Queensland? When I want to study in Australia, where would I go? Melbourne University or Sydney University, Who goes to University of Queensland? If I want to study In New Zealand, I would pick University of Auckland.
You have to scale accordingly to have a apples to apples comparative. When you compare Sydney with Chinese cities. Don't tell me you would compare Sydney with maybe Tian or chengdu? No you compare Sydney and Melbourne with Shanghai and Beijing.

Hey Kimy , just a note of

Hey Kimy , just a note of congratulation on the passing of the bill last night...I must admit the thought  of you and your manhole brought a sympathetic smile to my face.
 Have a champers on me old thing.....not Chardon either.

Christov, actually I was

Christov, actually I was thinking that New Zealand just became the gay central for the world. I hear there are thousands of Australian gay couples just lining up to get married in New Zealand John Key tourist dollars will have to go towards gay churches and gay bars. Not too sure how it works? Do gay girls go to the same bars as gay guys? Or do they go to separate bars? Which means planning for separate gay girl bars and separate gay guy bars?
Let me know where the gay girl bars are. I think I might just go hang there.

Hang there...Kimy..I want to

Hang there...Kimy..I want to be a lesbian...but not one of those political ones.....more your , what a waste type.
 Your right though, tourist mecca with an Adam Lambert Chapel in every Casino n Bar.

Kimy - I can't believe that

Kimy - I can't believe that such a fuss had to be made to get a piece of legislation especially a piece of legislation that causes no harm to anyone. Shows what a pathetic society we are and how prejudiced some people are.
 
If Key wants tourist dollars coming in here then he had better address the RMA very soon as it is causing enormous problems for some venue owners.
 
 
 
 

Thanks Sorel....that short

Thanks Sorel....that short piece ...was a sight for sore eyes....very....very...funny....still laughing.

This report is pure BS

This report is pure BS manipulation by the REI as the seek to justify what is happening. Try looking at it another way. Look at what $400,000 buys you in Auckland v what you get in New Plymouth, Wanganui or where ever. Whan taken from that perspective Auckland has always been over priced. The regions only grew faster because Jaffas realised they could invest in the regions much cheaper than the smokes. In the early 80's I bought a basic box in the nappy valley side of West Harbour for $80K, a relocation to Wanganui saw a similar amount buy a significantly better quality and bigger house. This has always been the case, yet the money earned did not vary much! 

Far too much emphasis is

Far too much emphasis is placed on prices being paid and this is setting the precendence for prices of other properties within the area. Property is valued by a persons income and ability to service the debt. This is not a true valuation method and fails to take into account the basic business costs of owning a house.
There will be area differentials in pricing due to desirability of those locations and the general wealth of those living in different locations.
 
There are numerous players in the housing market and all have a different reason for being there:

  • The average home owner needing a roof over their head.
  • The property investor
  • The Speculator
  • The off-shore investor
  • The off-shore investor wanting to immigrate to NZ
  • Central and Local Government
  • Other business owners/investors diversifying
  • Other Government Agencies.

 
There will be other people not mentioned above. However the point is that each is buying property for their specific purpose and all are competing against each other and the ability to pay.
Some don't want to pay rent anymore, some want rent from others, some want tax-free advantages, others are lowering their tax obligations overall etc.
 
The real value from land and buildings has been removed and the value is in the reason. And people need to have the ability to afford their specific reason.
Realestate agents, Governments, banks, speculators etc all know this.  How many legislative and policy changes have occured that have directly impacted the price of housing stock? - I have lost count of the changes in the last 10 to 15 years.  None of the above care as they are all getting a pluck at the same cherry - and this cherry derives a constant form of income for them.
 
Those on the other side the ones paying all the expenses go along with this as they are getting a small increase in capital on an annual basis and they think it is worth the effort.
 
Every other business type monitors cost of stock as they know people will invariably walk to the next place looking for the best deal. When it comes to housing however people snap up property within a very short time-frame even though many will spend the next 20 to 30 years paying off their debts. Historical annual lifts in valuation are not considered over historical annual costs of owning property.
This behaviour would not be considered historical normal buying behaviour in regards to housing. However it is the pattern that has emerged and is widely entrenched.  Everyone is chasing the fat in the market and the basic fundamentals have been discarded. Buyers are using technical analysis methods over fundamentals.  People are simply bullish on property and the trend is their friend.