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Housing report: Barfoots sees strong May, but it may be ‘flash in the pan’
June 4th, 2009Bernard Hickey delivers a Housing Report in association with ASB, including news from Barfoot and Thompson that house sales in Auckland were strong, with the average price up 6% and the volume up 1%. But economists say this may be a short-lived flash in the pan once higher mortgage rates and higher unemployment hits the market.
Tags: Bernard Hickey, Housing
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June 5th, 2009 at 8:10 am
Word is out June 10 and 24 are the key US 10 year and 30 year bond sales that will provide the clearest indications just how high and how fast rates will rise. Bernanke has been trying to jawbone the rate down but Mr Market is wise to the games being played. Expect the cost of both bonds to rise and an immediate spike in rates over here. Also, note that with the USA bonds going higher, the future for the cost of mortgages in the States is bleak, which in turn signals tougher times ahead for that sector of the market, and that in turn plus the arm reset wave about to hit, will stop any growth dead. So read that into the NZ market and you get a double blow. Higher rates and by late 2010 a second downturn in the States spreading everywhere.
Throw in rising oil prices, petrol and diesel too, plus the flow on through the economy.
June 5th, 2009 at 9:02 am
Just for the record the housing market bottomed out in Dec 2008. If you purchased a house then and fixed your interest rate at 5.9% for five years then well done!
It is now a very very steady market and firming with long term interest rates rising. From this point on the longer you wait the more expensive it will become!
In Auckland there is a tremendous shortage of stock, so most of the bargains have well gone. Even those mortgagee sales are fetching very good money when you consider the risks involved.
June 5th, 2009 at 9:44 am
Having a wee dream there Gavin.
June 5th, 2009 at 9:59 am
“It is now a very very steady market and firming with long term interest rates rising. From this point on the longer you wait the more expensive it will become”
Right, I’ve stopped laughing at this economic rubbish. Back to school Gavin.
Rising rates leads to demand destruction for credit in NZ. ie fewer people deciding it’s a great time to borrow money and buy property. Which as any 4 year old will tell you, falling demand brings falling prices.
June 5th, 2009 at 10:31 am
Gavin Jones
“shortage of houses”…
did you notice that the average rent fell by $20… read
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10576540
if there is a shortage, rents would be going up, basic knowledge..
Matt in Auck, im surprised you didnt pick this up..
June 5th, 2009 at 10:34 am
Wally, just with regards to your first comment, 30 year mortaga rates are the highest now since Dec 2008, a jump of about 50 bps
June 5th, 2009 at 10:35 am
here you go …http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10576605
June 5th, 2009 at 10:55 am
Gavin,
What a load of rubbish. I hope no one is listening to you. If you purchased in the last two years (and recently) you are a dam idiot. Watch your equity (deposit) shrink as house prices continue to fall.
June 5th, 2009 at 11:10 am
Yeah John I’m on to it. Must shift my 100 billion out of US T Bills and into
something safer.
June 5th, 2009 at 11:51 am
Amazing how things turn around quickly. Debate is switching from housing slump to another potential housing boom. Who would expect it only 3 months ago.
But then, 18mths ago not many expected prices will drop by almost 10%.
June 5th, 2009 at 1:50 pm
Wally and John. You are welcome to your thoughts, they will always dictate the path you will follow, and that is why most of the wealth of a country remains in the hands of 20% of the people. Cheers.
June 5th, 2009 at 3:00 pm
John yes good point re: rents. This tends to support my view that the whole surge in migration thing is a misnomer. It does support my previous views that the increase in net migration is due to fewer young people going on their OEs, because these people will be flatting with their mates or living at home with ma and pa this will be placing little pressure on rentals
June 5th, 2009 at 3:10 pm
Matt, don’t dismiss an effort by Key and English to pork some short term growth data in time for 2011, on the back of a govt assisted inflow of ‘wealthy’migrants. It’s the time honoured manner every NZ govt has used to fake some economic growth and get re elected before silly punters wake up to another motorway being blocked solid and the power supply running short.