Kiwibank CEO urges would-be 1st home buyers to take the plunge so long as they can afford to

Kiwibank CEO urges would-be 1st home buyers to take the plunge so long as they can afford to

By Gareth Vaughan

New Kiwibank chief executive Paul Brock is urging potential first home buyers not to be spooked and to go out and buy, so long as they can afford to.

Brock told interest.co.nz that purchasing a first home was “almost a rite of passage for New Zealanders” and that potential buyers shouldn’t be put off by concerns that house prices will fall, interest rates will rise or by a weak economy.

“I think at the end of the day there’s no right or wrong time to get into the (housing) market,” Brock said.

“The key is actually whether customers themselves can actually afford it, afford the loan. And that should be the primary driver.”

Brock, who recently replaced Sam Knowles as Kiwibank’s CEO, said he would be concerned if people were being put off home ownership. He noted the overall housing market had slowed down “quite a lot” and, although he didn’t have the data at his fingertips, there was a feeling that first home buyers might be stepping out of the market.

“That’s a bit of a concern really for New Zealand. From my point of view home ownership is really good,” said Brock.

“It’s one of those things that’s both good for the individual to get started towards financial security, I think it’s good for the country and it’s also good for the community that people are owning their own homes.”

“In a way it’s almost that rite of passage for New Zealanders, the opportunity to get started and in many cases it is the first step towards financial security,” Brock added.

“Making that step is really, really important. So I would be concerned if people are being put off by views on property prices, or views on interest rates.”

Kiwibank's strong growth slows

The state owned bank’s most recent General Disclosure Statement shows Kiwibank’s mortgage book rose by about NZ$307 million to NZ$9.6 billion at June 30. The June quarter saw Kiwibank record its slowest mortgage growth since the June 2008 quarter when it wrote about NZ$261.7 million worth of new business.

But although Westpac’s housing loans rose more in the June quarter, by NZ$365 million, Kiwibank's mortgage lending growth has been spectacular over the past two years as the bank has offered discounted fixed mortgage rates and variable rates, as it has outstripped mortgage book growth from the big four Australian owned banks ASB, ANZ, BNZ and Westpac. See all bank mortgage rates here.

Since the June 2008 quarter, Kiwibank's residential mortgage book has grown by about NZ$4.7 billion. However, Brock acknowledged growth had slowed in recent months saying it was a demand driven slowdown.

“The market has slowed down a bit and that’s really driven by the economy,” Brock said.

“But at the end of the day what Kiwibank is all about is, and we’ve been about this all the way through the global financial crisis, is continuing to stick to our principles and making sure that we do continue to lend. And we have continued to do that all the way through.”

Kiwibank has continued to lend more than 80% of a house purchase price to some customers’ right through the global financial crisis, he said.

The most recent monthly figures from the Real Estate Institute of New Zealand (REINZ) showed 4,287 properties were sold in August, down on the record low July volumes of 4,411 and down 27% from 5,878 in August 2009. REINZ said the median house price in August was NZ$350,000, up from NZ$349,000 in July and above NZ$346,750 a year ago. REINZ's September sales figures are due out this Thursday.

And Quotable Value's September report showed property values in the three months to September were down 5.3% from the November 2007 peak and down 1.4% from March this year, but up 2.0% from this time last year.

'Daunting experience'

Brock said buying your first home could be a daunting experience but it didn't necessarily need to be. Potential first home buyers should get in touch with their bank , find out what steps they needed to take and ascertain what they could afford.

"And then they can go off and look at what sort of properties meet that sort of criteria."

Various issues such as concerns over falling house prices, taking on debt and lingering economic uncertainty and a lack of confidence were spooking possible buyers.

"I think that the reality is it’s pretty easy to spook people who are just trying to get started on what can be seen as quite a daunting exercise," said Brock.

"But I’d reiterate, there’s no right or wrong time. You don’t sit there and wait for the right time. What you do is you figure out whether you can afford it and then you get in there and talk to your bank and get started."

"If you can afford it you’ve really just got to do it."

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?

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84 Comments

“I think at the end of the day there’s no right or wrong time to get into the (housing) market,” Brock said'Dop

But,But, is the right time for them the right time for you?

Did he come from a marketing or real estate background?

Hamish , dead right mate , thats exactly what I thought as I read the article . Luckily most Kiwi's are educated enough not to swallow this drivel and  understand the property market could still go south , and late 2011 could be the time we find a bargain . Right now houses are at least 20% over the odds 

We are cashed up , renting from a PI ( who is subsidizing our accomodation as his mortgage exceeds the rent we pay ) and saving $300 per week compared to when we owned our house . Frankly our mortgage was a ring around our necks and we can at least live a decent life  . We will use our $ 150 k deposit and the savings to buy when the market  comes off the boil , not when some smart Alec Banker tells us its okay.

"...although he didn’t have the data at his fingertips,.." Poor,poor,poor ! You don't come out with that kind of comment in an on-the-record interview... It seems to me that Mr. Brock lacks more than just a 'bit of data' !

PS: I've just steeled myself to re-read the article. Just the first two paragraphs are enough to make me glad I don't have any deposits with Kiwibank. Run far, run fast....

First Home Buyers should not listen to this man.Is he going to rescue them when they get into negative equity and get under pressure. No. Banks just want to get money out there earning interest and ulitmately they do not give a damm about the punters if they get into trouble. Only idiots are buying now unless they are buying and selling in the same market. FTB's should continue to wait as houses will continue to drop in price and therefore they will be borrowing less which can only be a good thing.  Watch the market values drop and win win win.

“I think at the end of the day there’s no right or wrong time to get into the (housing) market,” Brock said.

Was Paul Brock a former real-estate agent ?   I get the same comment from agents whenever I ask them about the market. 

Yeah, it's a bit of a superfluous article, BH, to have a bank manager urging people to buy houses and take out mortgages...like an extended oxymoron?

and pardon me if i'm wrong but isn't it "rite of passage" not as our manager calls it below:

"Brook told interest.co.nz that purchasing a first home was “almost a right of passage for New Zealanders” and that potential buyers shouldn’t be put off by concerns that house prices will fall, ...blah blah..."

hmm..how do i spell pedantic?

Thanks Rob, it's now a "rite" of passage.

No one in their right mind takes their hard earned deposit and a substantial part of their future income and sinks into anything and especially a large anything that could lose them a substantial part of their deposit and income without thinking about it and considering their risk of loss, and right now thats a real risk of a large loss....

In the early 1990s in London I saw many ppl I knew lose their homes and still owe substantial sums...they were screwed for years.....banks didnt care...they just drove ppl into despair with "legal" harrisment...

And we have a repeat....Just look at the US where first time buyers now could be 30% or more under-water and we dont have jingle mail....its all on the owner.....all the risk all the losses....

Of course when that happens it leaves the bank this joker runs exposed....oh no his bonus!

regards

Oh, brother.  Think Fannie Mae, Freddie Mac. There's never a bubble so big as the one where taxpayer money stood behind the last institution still huffing and puffing it up.

Nicholas Arrand said  ".....Just the first two paragraphs are enough to make me glad I don't have any deposits with Kiwibank. Run far, run fast......"

Sorry, the poor bloody taxpayer can't do that - unless they leave the country.

I wonder if any hedge funds have worked out ways to short Kiwibank?

whoopppee Kiwibank manager...here's a projection from the future for your suggestions... when Barry Obama relocates to NZ to be with his "friendo" Johnny Key:

The White House has ruled out a temporary ban on the repossession of homes, despite a growing row over alleged malpractice. Some US banks have already imposed their own moratorium on foreclosures while they investigate possible legal flaws in the eviction process. Amid claims that shoddy paperwork led to wrongful repossessions, calls have grown for a nationwide moratorium. But a White House spokesman said this could have "unintended consequences".

Last week, Bank of America said it would extend its ban on sales of repossessed homes from 23 US states to all 50. JPMorgan Chase and Ally GMAC Mortgage have suspended foreclosures in 23 states. At issue are claims that foreclosure documents were signed off without proper checks and people were wrongly evicted. BoA is looking into whether homes were repossessed by so-called "robo-signers" and other automated processes, whereby mortgage company employees or their lawyers do not thoroughly verify the information in them.

With banks expected to take over a record 1.2 million homes this year, up from about one million last year, according to the real estate data company RealtyTrac, the foreclosure issue is a hot political potato. "American families should not have to worry about losing their homes to sloppy bureaucratic mismanagement or fraud," said Senate Banking Committee chairman Christopher Dodd last week. He also announced that the committee would hold a hearing next month to look into mortgage servicing and foreclosure processing.However, on Tuesday White House spokesman Robert Gibbs said that a temporary ban could have an unforeseen impact on the ailing US housing market. "There are a series of unintended consequences to a broader moratorium," he said. President Barack Obama's administration was determined to "get to the bottom of" a problem of hasty foreclosures.

But Mr Gibbs added: "We want to take the just and necessary steps to ensure that the process is being followed legally. At the same time, we don't want to see broader harm done to the housing market and to the housing recovery. Critics of a moratorium have warned that it could penalise pension funds, insurance companies and other investors, making new loans more expensive. Investors seeking to recover bad loans might be prevented from doing so, critics argue. Tim Ryan, chief executive of the US Securities Industry and Financial Markets Association said on Monday: "It is imperative... that care be taken in addressing these issues to ensure that no unnecessary damage is done to an already weak housing market and, in turn, that there is not further negative impact on the economy.

 

Where's Wally when we need him?

Look, the fact that banks everywhere don't bother to observe some formality about which of their staff signs paperwork, does not alter the structural problem of people hopping onto a property Ponzi scheme at the advice of a whole lot of cheerleaders.

This paperwork crisis is the equivalent of the cops letting someone they've arrested go, because they failed to read him his rights. It doesn't alter the fact of what the guy did or didn't do in the first place. It's called "a technicality".

By the way, the USA had "bubble markets" and NON bubble markets. Half the lost equity is in the State of California alone. The NON bubble markets all happened to be markets where urban planners had not turned their local urban land markets into oligopolies. Funny, that.

"moratorium on foreclosures while they investigate possible legal flaws in the eviction process"

It's not the foreclosure process per se it's to do with a funadamental flaw in the securitisation process.  The foreclosure process has exposed the flaw.

http://www.nakedcapitalism.com/2010/10/josh-rosner-could-violations-of-p...

When the loans are divided into "tranches" in order to transform lower quality paper into AAA debt (and make a killing on the way) how is it possible to know in advance whether the loan is going to default.

Wonder whether the same thing applies to the securitisation process here.  Note that a key requirement is the "sale and purchase" of the mortgage note.  This can't be done electronically.

Sheesh.  Wide eyed and bushy tailed.

“The key is actually whether customers themselves can actually afford it, afford the loan. And that should be the primary driver.”

Ponzi economics

Well I know if owned a bloody Casino ...I'd want Brock running it for me.

He understands the needs of first timers.....a bit of guidance....a poo pooing of those anti property types at Int.co.nz.......confidence restored......lets talk money and help you to take your first real big punt......it's your rite of passage ......while your right passage is exposed......lets all take the opportunity  together to really enjoy some long term debt....eh....go on..

......."Just stick it on the card"  

From Bernard's 'Top 10', today, and one opinion on Mr. Brock's lending"..Housing is simply the wrong asset, at the wrong price, at the wrong time."

What was said is common knowledge but coming from him, if it really did, is worst than watching Reynolds fly fishing in the back waters saying use telecom XT has great coverage (yeah right great media coverage of how bad)

I think the spin doctors had the wrong man giving the message

it is true, only if you can afford not to have property that you can afford to own it

So the time is right, if the time is right - we know that already, but it sounds like he is drumming up business which is not the correct picture to paint.

However I agree with what he said. Now is a great time to buy property if you can afford it.

Reynolds was up past Glenorchy near Queenstown, and funnily enough if you go out there Vodafone doesnt have any coverage, and Telecom does. Guess they learnt their mistake after all the crap they got from their video conference ad set on Aucklands west coast when you couldn't get broadband out there for years.

Yep its now time for 1st home buyers to look very seriously at owning their own home.

And this is what I told my children (who where in the unaffordable bracket) a yr ago "hold off till mid 2010 then you will have a 12 to 18 month window...In the mean time save and your Kiwi Saver will also be there.

I believe so many posters are about 'investment; not home stablity... stability of schools for the children which is not there when renting. Also it maybe more profitable to rent, IF the 'profit' is put into savings, The serious 1st home buyer WILL do so but not for yrs on end.

Once in their home it becomes a 'compulsory' savings, rather than spending on labels.

The market from not long ago for the next 12/18 months (maybe a little longer) is going to be stable, till the long term ave comes up and meet current prices, then it will climb in a nice orderly manner for many yrs to come. They over pay the mortgage as much as possible as early as possible to get at least a 30% equity in the home as soon as possible..When the market starts climbing they will either have that or the increase will tip them over the 30%...From there on in they cant loose.

Also the 1st home buys is not a trader like a 2nd hand car dealer, they will be there for between 5 and 10 yrs, maybe longer. Where will they be then...Well the same place all those Anti BBs get upset about...that place where those who brought their homes 30/40 yrs ago or even in the 1990s/2000 before the craziness look place....sitting comfortably and the new potential buyer bitching about  "OH whoa is me its unaffordable"

And any of those potential 1st home buyers who are sitting around on their backside STILL bitching about "unaffordable" dont deserve to buy, cause thats all they have been doing for the last 3 or 4 yrs...Sitting on their bloody backsides , in their label T shirts bitching.

As my Grandmother used to say 40/50 yrs ago "If you want something you will get it, If you dont get it you didnt really want it in the 1st place, but just wasted everyones time talking about it"

Funny how history just keeps rolling over
Opinion, no prediction of a so called Doomsayer

Steptoe,

To be completely fair to your kids, I 'd say you need to look at MEDIAN MULTIPLES, both ours AND the history of crashed markets like California. Otherwise, you're just making another "greater sucker" or two for property Ponzi.

So what you are saying.."1st home buyers, dont do irent for the rest of your lives, move your children from school to school, dont let them have long term friendships..."

There is far more to life than your ponzi BS and sitting at a desk scratching your head over stats

I purchased both my homes at both times when not "advised" to...

We cant afford to give our children a helping hand into a home, they are doing it on their own, and with their own families for their families.

While all the rest of you sit on your butts complentating your stats, and still will be when this is all over, prices move , then stablise again over the next 10 yrs, my children will be ones that what you would call "lucky ones" who brought before the proverbial hit the fan... like the current batch who brought before the boom and now sitting quite comfortable.

Your 'white picket fence' idea of the world and how we ALL should be living is quite repugnant! Who the f**K says you MUST buy a house, have some kids and spend your whole life paying through the nose for both while being profited off? 

I suggest Steptoe you should go and see how many millions of others around the world do none of the above AND are quite happy with their lives!

Your' shoe box'  universe is getting boring and old. Youve been played your whole life, been a slave to a bank, payed thousands in interest and now in the twilight of life you still pretend it was worth it.  All that love of a material thing that means absolutely nothing in the 'big picture'

Also offering a two for one deal ' get two mortgages through us and get yourself a nice green visa card with $20k loaded on it' ....go on it's easy money...go on...

I thought about posting a comment here...but if I posted what I think, Bernard would spit the dummy and Wolly would be toast.

Dohhh! Bernard posted this for a reaction - and you are refusing to bite? He has targets to meet you know. Go on I dare you, just a few lines...

(It's not like we don't know what you are going to say...)

If you know then you know why it's no.

C'mon Wolly , you old trolley dolly...show us ya nasty!!!

Go on Wolly ;) You know you want to...

Why deny yourself the pleasure. Paul Brock doesn't want us to deny ourselves the pleasure... ;)

cheers

Bernard

Was Paul Brock an UGG boot salesman , previously ?  ............. He oughta be , with that mentality :

Tall story UGG KiwiBonk Loans :

UGGY Loans , muggy you

5 % down : UGLY uggy bank loans

Big UGGY bubble : UGH !

UGG crash : Super UGGG !

Gurgle UGGY equity

UGGing hell !

i like that ,gummy one!

Cant believe you did that BH

I expected Kiwibank to hit the spring market with a massive advertising punt, offering cheaper mortgage money on the back of the govt guarantee backing Kiwibank foreign borrowing...maybe Brock is telling his clients that they should not be offering to pay more than 30% less than the peak bubble valuations....maybe....but I doubt it because that would mean creating less credit...it would promise lower profits...smaller bonuses!

Doesn't he have an 'interest' in people buying houses, as without people buying houses, and them lending money, kiwibank wouldn't be able to make money.

As the US appears to be heading into a depression (and printing more money), and NZ not much better off (with our huge debt and borrowing), and a victim of what happens globally, I would be very careful. Agents will always use fear, saying things like 'house prices will always go up', and 'if you don't buy now, you will miss out, as houses  becoming more unaffordable'. Houses currently are not selling, as shown by the stats, and even agents are beginning to admit that things aren't good at the moment. It is also cheaper to rent than buy. The thing to remember is that in the next 5-20 years babyboomer owned houses and investment properties will be flooding the market, as they free up equity for their retirement, and supply and demend dictate prices will fall. Not to mention tax changes (now and int he future) that will negatively impact on property 

 Something like 20% of home owners in the USA owe more money than their house is worth. The good thing for them is they can walk away and send the banks their keys. It isn't that easy in NZ.

It's 'jingle mail' in only some states Rob...about half I think. The rest get screwed in the same way as peasants in Noddy. I read that link(re hastings) I posted on the other thread and wonder how this bank boss can make such statements with a straight face..but then he is a bank boss.!

Only a fool would buy now without cutting a full 30% off the bloated valuation in 07/08. An even bigger turkey would borrow to buy without the reduction. But hey there are turkeys out there fit to be stuffed and roasted.

Dat's it Wolly...push, push...oooooooooooh, the strain..spit it out...as fearless leader says " you know you want to"....strain hard now, Wolly...aaaaaaaarg!

Its not home ownership that is the problem, its the financial instruments that have enabled people not only to leverage themselves to bid for properties they really can't afford, but to speculate on this asset class.

"In a way it’s almost that rite of passage for New Zealanders, the opportunity to get started and in many cases it is the first step towards"......... debt serfdom to the banks.

OK Kiwibank, why don't you step up and offer no recourse loans.  Say 10% down for buyers.

That way the 1st 10% of loss is the buyers and Kiwibank is on the hook for everything beyond that.

Sounds fair to me.

No recourse loans.....! Brilliant. Talk about calling their bluff.

Where can I buy one of those anti-porn protection programs to protect my kids (30+ year olds) from being able to see this drivel?

;o)

Apart from Mr. Broke’s comment another bomb starting to hit the nation – a weather- bomb.

Are we prepared – what can be done - just cleaning up afterwards ?

What are the consequences for our economy with more severe weather events ?

http://www.stuff.co.nz/national/4228347/Heavy-rain-hits-East-Coast

Don't you mean a weather war is about to hit the country , Walter ? We never say " bomb " around here ........that  tends to get the building evacuated .

We have cold wars . Water wars . Currency wars . Wars of the generations . And now , " weather wars " ............ aggro wee varmints , ain't we !

  1. With the strongest, obviously most important industries agriculture/ tourism been badly affected by increasingly severe weather events, I’m puzzled none really makes that an issue.
  2.  Another topic is the encapsulation among media, the public and the politcians. Why do people like Bernhard working for the media not regularly, on a weekly base engage politicians talking to us the public - debating important issues. I think this forum is getting increasingly frustrated (see today). Bloggers spending hours of their time providing brilliant ideas – for whom ? In stead of going in a circle – we need some boosting here - talking directly to people in charge.

 By the way houses are already evacuated.  

C'mon Walter, settle down.  It is only a heavy rain event. It isn't as if it never happens after all one resident said :

"There's quite a few homes there, that area has always been a problem," he said.

"If the water gets beyond the first trigger point they have to be evacuated, and it's beyond that first trigger point now."

I have a mate whose farm had significant areas regularly being flooded for sustained periods of time.  It never used to happen.  Reason:  In the 'old days' we had locally run drainage boards who saw to it that drains, especially larger ones, were regularly cleaned out.  But the modern wisdom was to do away with the drainage boards.  Consequently the greenies in the regional council deemed it no longer a good policy to keep the drains clean and clear.  After many years of floods the finalstraw for my mate came when nearly half his farm spent most of the winter under water.  He (along with other similarly affected farmers) put a case to the RC.  For the last couple of years the drain has been cleaned with NO flooding whatsoever on the farm land - just like the 'good old days'.

As a farmer I expect to have 1 or 2 bad years in 7.  That can be caused by low payout or by weather.  A local down south told me that the last time they had snow like we had on the farm was Christmas day nearly 50years ago. So it wasn't as if it had never happened before.

I hope Andrewj is getting some of this precipitation on the east coast.  Just hope also though that it won't be resulting in slips.

An onslaught of heavy rain has come at the worst time for horticulturalists and grapegrowers in Gisborne, with some newly-planted crops completely ruined by extensive flooding

President of the Gisborne Winegrowers association, John Clarke, said after a tough year last year, the flooding was just "another frustration to add to the pile" for farmers.

"We don't need this sort of thing. But it's all in the joys of farming," Mr Clarke said.

Mr Clarke said the biggest concern for growers would be getting into the vineyards to spray the vines once the water cleared.

"It's teased us. It's got right up to where it could cause critical damage and then has left it, so a good outcome," Mr Davies said

"Any spray on the vines would have been well and truly washed off after the last couple of days."

Mr Clarke said however, the damage would be much worse for other growers who had just planted new season crops.

http://www.stuff.co.nz/national/4231341/Flooding-hits-Gisborne

Told yer ! It's a weather war , Walter . .......... Woefully wet ...  ........ . Wonder why ? What'll Wellington ......... do .

Another bail-out !

Since the world changed forever and NZ has an unbalanced, patchwork economy, everyone here knows I’m a strong supporter of a structured economy.

Comments above point to a serious question: Do we need a better structured economy to compete with the rest of the world ?  In the agriculture sector is it not more sensible start producing food which is demanded in the markets but in the view of circumstances of severe weather events. It seems the farmers still don’t come up with a good mix, losing not only millions, but too many animals and plants, pride and hours of hard work

Because more severe weather events occur all over the world, I think NZagriculture should use the potential - react now and make changes.

Come into my parlour, said the spider to the fly.

"there's no right or wrong time" !

"rite of passage" !

Not bad for a NEW CEO ! Makes me laugh really to here this from a CEO, more like the rantings of the Captain of the Titanic.

Now I could understand that.

"By the way Captain', whats that looming Dead Ahead with a Chinaman sitting on top of it!

"ICEBERG" !!!!!!!!!

What we have here is a bank trapped in its own web of credit creation chaos with Mr Market arriving in Noddy to shove a razor sharp needle into the property ponzi scheme.....Brock is clearly desperate to keep the 'game' going. I expect his comments will result in Bolly offering more pork at lower rates for longer...some sort of BS 'cash' for securities scam.

Truth and reality amount to Mr Market having his way sooner or later. Bollard talks about the economy being brittle!.....this is the price Noddyland pays for the boozeup on cheap credit...for the fraud and corruption...the graft and lying...the utterly stupid useless govt leadership and gutless RBNZ. ....above all else it is the cost of the greed.

Brock can blather all he wants...he will not alter the market from this new direction...the market is heading down.

"oh I get it now"

What he is really saying is:

"If you 1st home buyers DON'T rush in and take the morgage money on offer I"m going to give it to Greedy smart property investors"!

That way they can buy up all the spare houses so you will never be able to afford to buy in your lifetime !

"Nice One" Brocky

The banking "system" is supposed to be about allocation of savers' capital into productive investment.  If the best the banking system can come up with is "pumping the value" of an existing asset then they should be closed down.  There should be a rule that banks can only lend on a new house, any sale after that should be vendor financed.  The tragedy of this is that it ends up as a huge misallocation of capital, a whole lot of debt and not one extra job in the economy to pay for it

I endorse the Steve Keen compromise. Banks can only lend on the 'productive' part of  a housing asset. He suggests 10 times the annual rental revenue. ( though how that's policed, I'd have to see!). ie: $450 pw = $234k loan. Over that, it's up to your equity. The higher the nominal price, the higher the owners equity; an incentive not to overpay.

Think its more than that.

Under the Keen compromise you could only claim interest expenses against 10X the amount of rent received.

So, for example, if you borrow 1,000,000 dollars, and get rent of 30,000, you can claim interest expenses up to 300,000 and have to fund any additional interest from your own pocket without the assistance of the taxpayer

I'm not so sure.  What says the rent represents the "productive" part of the asset.  It's too easily manipulated and there is a 10x leverage as an incentive.  So, how is it determined for an owner occupied house, in which case there should be tax on the imputed rent as well.  It seems to me that there is no risk in investing in an existing asset, really, what value add is there to the "investment" decision so if the market worked the way it was supposed to the bank manager that manages to find this should be paid virtually nothing, and the interest rate should be very low.

Reading posts about 'Dairy expansion reaches peak,' I realise that there are some people who use this site who really are worth reading. Then one reads the often emotive stuff like numerous responses to the Kiwibank one here and unfortunately youalso get  to read a lot of rather opinionated people just sounding off. Oh well....    

So what you really mean is "Posts that say the same things I do are good, but the rest are crap and why won't they just shuttup and go away?"

Then one reads the often emotive stuff like numerous responses to the Kiwibank one here and unfortunately youalso get  to read a lot of rather opinionated people just sounding off. Oh well....    

In my day it was called pointless drivel

Is this guy seriously going to try and justify a banks existence as a key player in 'social engineering'? and try selling us that being in DEBT is great?

Paul, I have savings accounts at your bank and I'm debt free (completely) I could go and buy a house now if i wanted BUT why the hell would I when I know the prices people paid for these trumped up 'garden sheds' are ridiculously overvalued and will continue to drop in price  for years? The world economy is totally screwed and THAT FACT ain't going to change anytime soon. Screw you. Ive got a good mind to move my money

Quite a retort Justice. When I returned to NZ briefly it became obvious to me that the majority of people are still only concerned with the treadmill, of marriage, house & kids. While that is all very well, leads people into passing on bad advice, such as the above. The housing market is going to be declining then stagnant for an unpredictable period of time, forget 12-18 months that is simply dreamland. There are not many tools left in the shed to keep the market pulse alive, although I would concede that the variable is some as yet thought of way for the masters to somehow keep the global ponzi from imploding. Now is most certainly not the time for FTB to be getting into the market, you would have rocks in your head. With a large deposit (if that’s what it gets used for), and adding to it monthly while back in the UK, frankly I would not even contemplate buying now if there were a gun to my head. There are not bargains yet, prices are not reasonable, nor to they map to the uncertainty of the job markets. Personally I would rather rent a really nice house in an area I would want to live in, than buy an overpriced piece of S* in an area I would rather not live. Not having kids of course takes that pressure off making poor decisions in some ways, and I can understand the desperations of those who badly want their own house. Banks love this of course because it makes them lots of money, sadly society suffers from the consequences when it all turns to crap, and taxpayers are socialising the future losses of the next big bust.  Steptoe, imagine how you would feel if your advice sent your kids and grand kids down the financial toilet, because the risk of your advise turning out badly, is far greater than the risk of sitting tight and seeing how it plays out!

I wonder what that programme on tv3 tonight will do for Auckland property prices?

Most contributers seem to think owning a house is all about how much it might lose or gain in value. That's fine if capital accretion is your driver but if you believe a house is primarily a home, you have an aversion to being a renter and you can afford a mortgage, then Brock has a point, despite his vested interest - you may as well buy now as at any time. 

Those to whom capital gain or loss is everything and don't mind playing russian roulette with the market and their chances of ever owning a house - fine. Gamble away. But don't bleat if you get your predictions wrong and the market doesn't fall in the way you predict. Others of us buy homes simply because we want the joy of owning our own place and don't really care all that much what happens to values because greed of gain or fear of loss is way down our list of priorities. 

There is a difference between gaining a little, a lot and losing....I bought because I wanted a home for my family....gain wasnt a big issue, I have gained but that over the next few years that could be wiped out....now losing $150K of paper money I never saw is hugely different to buying at $400k and finding its worth $250k....etc....bit of a mental impact that.

However going into neg equity has 2 clear impacts, you lose your capital and if you lose your job u cant move, mobility is curtailed.....

regards

Steven

Yep, thems is the risks - less mobility, redundancy etc. So you weigh them up against the pleasures of your own place don't you. And either accept the risks or forego the pleasure. You can wait in the hope your dream will be more affordable ( and thus the extent of the risks lower) in the future, but there is no guarantee it will be and meantime you're older and those opportunity costs of waiting have been incurred and can never be completely regained, even if prices do drop.     

"So you weigh them up against the pleasures of your own place don't you." - You do realise it's only a house, right?

"It makes Me Laugh Really" all the (SPIES) sitting on the side lines "

'WaIting for A" BARGAIN" AT OUR EXSPENCE and THEIR " AGENTS" like this NEW CEO

Thinking they will do us all over AGAIN !

Yeah Nothing Like Throwing a $30 bucket of paint at a house and Bragging to you mates at the BBQ how HARD you worked for the last month to make a hard $100,000 grand ////!!!!!!!

AYE SPIES.

" Hey Brocky" got some advise for you ... since your'e the NEW CO

Stick TO BANKING MATE thats if you know what that is.

Don't listen to people like Steptoe. There are a lot of people who bought during the so called boom who wish they had not done so now and therein lies the problem. So many people now trying to sell and so few buyers.  Sure some people got in before 20002/2003 and they were lucky. The rest of them bought largely with debt and that needs to be repaid. This current downturn in prices is going to last for years as the whole saga was based on debt fuelled greed not savings and equity. People should just continue to rent and smile as they watch prices continue to come down and the need to borrow so much reduce by the month. Rent is not a waste of money when you are saving tens of thousands while you wait. And paying interest to the bank just makes the bank your landlord.  As I see it most NZers realise the value of property is dropping and now is not the right time to buy.

I have no problem listening to Steptoe (or anyone else), even if I believe their opinion is laughable.

The facts of a situation speak for themselves and aren't swayed by personal beliefs.

To be fair I think people are being a bit harsh on this guy (although his comment that there is no right or wrong time to buy is very challengeable and rather disingenious - FHB's who bought just before the big crash in USA would totally disagree with him).

Property isn't likely to drop much further from here (save some economic calamity) so it probably is reasonably safe to buy if you can afford it and want your own home. Interest rates are still fairly low too. 

You are starting to sound a bit Bullish after all these yeas MIA!!

Have you been out property hunting again? ;)

Steps, good on you, I agree with what you say, your kids will do well

BH, you love stirring the pot with posts like this :), but have you had a 100-200 post story since the website changes??I bet you're praying for property prices to boom again lol. Bring back the man! ;)

So the bank man is telling people to buy houses. How do banks make a lot of there money? From mortgages. This is a very different form of marketing. Desperate? 

Houses will sell when sellers drop prices as buyers know they have the upper hand. A fresh batch of houses for sale on trade me today. Still at high asking prices.

 NEWSFLASH: A banker says now is a good time to get a mortgage.

 Wow, that's a surprise.

 IN TOMORROWS NEWS: Used car salesmen says now is a great time to buy a 2nd hand car.

 AND FOR FRIDAYS NEWS: Portaloo guy says there has never been a better time to take a dump.

Brilliant!! can't wait till Friday.

A bit may have been lost in translation . Hansard of what Porta-Loo guy actually said is :

" Hmmphhhhh , arrrrrrrrrhhhhhhhh , ooooooooooooooooooooh shite  , that's big , oh yeah , come to poppa , hmmmmmmmmmmphhhhhhh , ah feck , that's good , yeah , more , hmmmmmphhhhh , shagging hell ...... green ? bugga ...... aaarrrrrrrhhhhhhhhhhh , hmmmmmmmmmmmmpphhhhhhhh ...................... Aaaaaaaaaaaahhhhhhhhhh ! Oooooh , baby , that was good . "

Brilliant.

The roads up Auckland way are thick with people trying to escape the coming erruption.....property prices collapse......OllyN running alongside the traffic screaming "it's a tv programme.....come back for my sake........... cummmmmmmbaaaaaaaack"

And that's what all the" I'm in it for a 25 year hold, and then it's, they're, all mine !..." investors forget. Just like Christchurch, one never knows what risks are around the corner ( or in the volcano!). 25 years, or however long, is a long time to hold risk, whether it is natural, market or personal .

At least it solved the problem of getting across the harbour at peak rush hour....!

Forget houses , sink it all into PNA ! 83 cents now , and ripping towards $ 1 . Love the copper / gold / moly !!! [ and the total lack of a RMA / unions / safety officers ]

Good to see that whinging mob are back again.

8615 houses sold in the last 12 months  by one firm alone for a total of $4,616,268,672 which means that around 25, 000 people said you are wrong. and spent over four and and half billion dollars to prove it.

Eat this chickens:

http://www.barfoot.co.nz/Info/Market-Info/Full-Sales-Reports/September-1...

Yeah, the number of people who bought houses in California in 2007, at median multiples around 6, was "proof" that THAT market was "sound". Yeah, right.

FYI - I have posted a follow up to this story featuring the latest weekly Reserve Bank mortgage approval figures, plus comments from the big four banks and Mike Pero Mortgages - http://www.interest.co.nz/news/mortgage-approvals-drop-again-kiwibank-bo...

Which woodpile has this dude been hiding under ? Anyone who incurs any debt in the current economy needs his head read . 

There is the threat of deflation in the US and a double dip recession there which will affect us .  New Zealand is overborrowing to stay afloat . Kiwis know the most sensible thing to do now is pay down all debt and dont incur new debt until the economy is well and truly in recovery . This could be a few years off