ANZ's economists don't think the current heat in the housing market will last, expecting it to cool next year

ANZ's economists don't think the current heat in the housing market will last, expecting it to cool next year

ANZ's economists think the housing market could start to cool next year.

In their latest New Zealand Property Focus report, they say recent market conditions have created a perfect storm for rising prices.

"Housing demand has remained strong, spurred by low mortgage rates and a speculative dynamic," the report says.

"Added to that, a lagged response in new listings has meant that buyers are chasing relatively few properties - a perfect storm for house price rises."

However the report sounds a note of caution about how long those conditions will last.

"We are wary about the sustainability of the upturn," it says.

"Low mortgage rates will provide ongoing support, but the market appears out of step with fundamentals.

"The RBNZ is planning to re-impose LVR [loan-to-value ratio] restrictions, and banks have already signalled a tightening in credit conditions for investors.

The report also sees an increase in listings, which will increase the numbers of properties available for sale.

"The outlook is uncertain, but on balance, we see some cooling in the market over time," it says

"The question is how long this raucous party can go on.

"Population growth is very weak, new builds are becoming available, and income strains are likely to increase as the impact of the closed border on the economy becomes clear and direct fiscal support wears off.

"And for those whose incomes are unaffected, affordability constraints are expected to be a constraint at some point, even at low interest rates.

"Given these factors, we think that heat from the market will abate in time, though the support of low interest rates and abundant liquidity will provide a continuing offset.

"As the economic recovery stagnates in 2021, our current expectation is that the housing market will lose some steam, with a possible wobble expected.

"The outlook is uncertain and the market has momentum for now, but overall, we don't expect the current heat to be sustained."

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220 Comments

25
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And let's not forget the high possibility of another financial crisis next year due to all of the Global economic damage done already along with ongoing lockdowns and restrictions. New Zealand is holding up ok for now but its an economic bloodbath in many other countries and the Tsunami of defaults, insolvencies and bankruptcies is only just beginning.

11
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Yep it's like being at a party and one guy has been shouting all the drinks, of course we are going to have a good time. But that guy has just empty his wallet and now the party goers are discovering they spent there money as well, and the headache will entail in 2021, of course those non drinkers have been sitting back and watching...waiting...knowing they don't want that headache.

35
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And the bar noticed that guy ran out of money so they opened up a tab for him so they can keep the party going. So soon he will have a headache, and a massive bill in the future because the Reserve Bar of NZ wanted to keep kicking the can down the road.

21
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The authorities (lets call them govt) know that the Reserve Bar of NZ keeps letting it patrons over-indulge. They contemplate putting a tax on the drinks to reduce the incentive for patrons to drink so much but then they realise that the patrons vote them in so they 'drop nuts' and do nothing except yell at the owner of the Reserve Bar of NZ in public hoping everyone goes yeah it's his fault.

25
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The Reserve Bar owner knows that his regular customers are so greedy that they just want more, more, more. They get so drunk that they care not one bit for anyone else. They get hammered, get in their cars and then drive home ploughing through innocent people and destroying other peoples lives with zero regard for anyone. When they get home the poor wife and kids have to go without food again because all of the money has been spent at the bar. The bar tender can see the damage that his actions are taking on the general populace but he is making money from it and his other bar owner friends are doing well. He simply sees it from his elevated, privileged position as a first class problem.

11
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Orrsum, you wrote yesterday that shorty after you returned to Gisborne from overseas, house prices started going up a lot. You were incredibly lucky in your timing, yet, somehow you managed to miss the boat and now you're just sour that prices are going up. Had you bought when you came back you would be singing a very different tune now. We all make our own life

51
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I tried to buy several properties but every time I put an offer in I was outbid. Does that type of thing amuse you? Also, when you say that we all make our own life, we don't. Adrian Orr has made you rich. You didn't make you rich. The sooner you realize that, the sooner you come off your high horse and understand that you are not a Warren Buffet. You are no better than me. You were protected by the NZ elite. I find it disturbing that you constantly tell us all how much you made from property and how well you are doing and then say that your wife helps the less fortunate. Your type have created the less fortunate. We do not need crocodile tears. We can see you for what you are.

Seems pretty hysterical.

Orrsome, yes I do understand your position and I agree it's very frustrating. I'm an eternal hopeful and in the unlikely event you come on this site to learn, please listen to the following:
1) You are better off than 100's of millions who have not enough food or no proper shelter
2) Forget about me and forget about the other commenters here, you may find comfort in reading others complain as well but it will do nothing for your own well being
3) Of course there are circumstances out of our control that affect us all, forget about these as well
4) Use all the freed up time not complaining and not worrying about others to improve your own life and take action, I assure you it works, I don't come from money, my parents never owned a house.
I wish you the best, sincerely

14
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Good to see the sheep costume is back on again Yvil :-p

Gets a bit nasty when the wolf shows it teeth.

16
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I took action, Yvil - I think you'll be really pleased.

Dear Prime Minister

On the issue of housing, I believe the regulatory initiative/focus should not be on lowering the price of houses per se, but rather on lowering (and stabilizing) the cost of rent, with a particular target for policy effectiveness at the rental market for lower quartile household incomes. The regulatory initiative would be to set rent price controls (not a rent freeze), as a weekly rent maxima formula that is applied universally to
all rented properties, both existing tenanted properties and new-to-market rental properties.

The easiest formula to apply could be to base a rent price maxima on Rateable Value (RV). My cursory look at it, suggests that a universal formula might be, RV/1000 = weekly rent price maxima.

It may need to be tailored differently on a regional basis given RVs are reviewed three-yearly. My consideration has focused on the Wellington market where the RVs were updated in 2019. As RVs are reviewed every three years, CPI could be applied as a rent increase maxima during the intervening years. Such a universal maxima would specifically target regulatory relief to lower quartile income households, who typically rent the lower quartile residential dwellings (this is where I am seeing the greatest percentage increases at the moment). Many upper quartile residential rentals presently charge less than the maxima – as these prices at the higher end are more aligned to the market’s ability to pay.

It is the lower quartile that is most affected by inability-to-pay, and hence unaffordability (i.e., rents equating to more than 30% of household income). According to your Government’s studies;

“At a national level, the share of renter households spending over 30 percent of their income on housing costs remained fairly constant at 31.0 percent in December 2018 (31.3 percent in December 2017).”
https://www.hud.govt.nz/news-and-resources/statistics-and-research/housi...

That data is before y-o-y data on average rental cost increases for 2019/20 has been taken into account;
https://www.interest.co.nz/property/108127/rents-auckland-13-week-compar...

A rent maxima based on a formula associated with RV, has the following benefits:

• A formulaic approach that can be calculated based on already publicly available information.
• Lower quartile properties may become less attractive to property investors, hence taking the ‘heat’ out of the low interest rate housing market, and subsequently giving first-home-buyers (FHBs) less need to compete against the tax advantages afforded to investors.
• Lower rents allow renters the opportunity to save more for a home deposit.
• Should property investors in the lower quartile end of the market exit those businesses, the Government might want to instruct Kāinga Ora to purchase more private homes for State house stocks, in a manner that ensures that it does no displace or compete against FHBs or downsizers. (A number of days-on-the-market might be a metric for such purchases).
• The government need only review Accommodation Supplement maxima (which I believe is set regionally) every 3 years with the corresponding RV reviews.
• No tax changes are required to implement.
• The initiative would be welcomed by NGOs working in the area of inequality/poverty.
• House prices in the lower quartile should remain static, or possibly decrease with the introduction of the rent maxima.
• New builds should not be affected, as the market for new builds has largely been targeted at individual homeowners in the mid-upper income quartile (one of the problems with new development: the private sector is not interested in low-income housing as the profitability is lower).

There might also be a need to concurrently review QVs methodology of residential valuation for the purposes of rating (RV) which is presently based largely on market price paid in the surrounding area. With market prices spiralling out-of-control, every property, whether prior sold or not, has its rating valuation lifted. I have always preferred a rating methodology that recognises, not market prices (dollar value), but instead on the value of public amenities in the neighbourhood area and the proximity of the property to centres of employment and/or public transport services. A number (i.e., points, not dollar) scale would be far preferable to a dollar value scale. The dollar value scale simply fuels property price inflation.

I spoke to Twyford one time but now won't bother, they say they're listening etc etc

Even the PM has (theoretically and practically) decided not to speak to him anymore :-).

Arend is a bit like thatcher at the top of a group of (mainly) men... no one rates thatcher now but no one ever rated Arend they just fell for the hype. BTW your letter is total BS I dont say that too often but its obvious you don't know what you're saying... in my opinion Kate

Lucky there are a few people with bigger brains than us eh FH who can see the bigger picture...thank god.

It's Ardern. And not sure of your "(mainly) men" assertion - I count 36/65 female MPs in the caucus.

But yeah, perhaps I'm the one who doesn't know what they're saying :-).

Actually yes you're correct not Arend .... Ardern was in a muddle...

Did I say caucus members no, I was referring to cabinet which is mainly men. No change to the status quo Ardern is in a muddle as Labour has made a point of having equal numbers of each sex.

8/20 females in Cabinet.

You remind me of a business call I had from Bob Jones once. When I answered, he asked for the manager. I said I was one of two owners in the partnership. He asked, can I speak to the bloke, then?

I'll let you guess from there - lol.

You are obviously very touchy about the ratios of male and female in parliament as the analogy was regarding Margaret Thatcher as a leader vs Ardern. Regards your letter would you prefer that we praise your letter for you making an effort or for its value in the points you make... Bob Jones will always be Bob Jones, tongue in cheek and abrasive. Enjoy your night

That's awesome Kate, well done! That's precisely doing something rather than just whinging

Interesting proposition Kate. Would that not cause a flight to quality, and as such be regressive? Anything below 500K would likely have it's yield crimped, possibly resulting in a negative feedback loop if the house then depreciates in value. Conversely, houses in the 700K+ category with a market rent below $700 pw would become more desirable to investors pushing the house values up.

5 percent yield legislated for would be very attractive and higher than the yields we currently get. When Kate hears this her hair will stand on end lol

lol not trying to make anyone's hair stand on end, I just imagine that 7-12% yielding houses have low quality tenants in bad areas. You know it'll be a hard time with holes in the walls etc. but the quid pro quo is high yield... maybe?

Instead of applying a stick why not a carrot? The reason housing is favoured is because of tax deductibility. Why not make other investments tax deductible. Initially it could be done inside trusts which are inherently "ring fenced". Say an entity wants to borrow 300k to invest in gold, stocks or whatever then the interest on the loan would become tax deductible. The net effect would be a diversification away from residential real estate as an investment. You'd lower rents eventually, but in an organic way. It happened because investors were enticed to deploy their capital elsewhere.

In normal times - yes, that all sounds rational/logical. But in crisis times - such as we are experiencing now, it would take too long for the transition. This housing/accommodation crisis for our lower quartile household income earners is spiraling out-of-control as we speak.

Urgent action is needed. Hence, rent caps/controls can be implemented immediately. We've capped the price on carbon - there's really no reason why we can't cap the price on rent. And it's not a rent freeze per se - many investment properties will be unaffected.

Yes I heard that from a friend who works in the MSD. Well it really does all stem from an acute overreaction to a certain virus. I was thinking of writing a letter to the PM's science adviser but then I though what's the point. My views are almost heresy in New Zealand now. Doesn't matter that the worlds leading experts, Nobel laurates, the British Medical Journal, American CDC all say the same thing. Anyway regarding the current crisis, my preference would be to treat the cause, and not the symptoms.

No I would not regulate for a particular rent yield. I'd go for a formula based on RV as a rent maxima. If the rent maxima fails to deliver a yield, investors will not invest (unless they want to speculate that capital gains will make up for losses incurred).

Anything below 500K would likely have it's yield crimped, possibly resulting in a negative feedback loop if the house then depreciates in value.

Only if purchased recently.

Here's a good example of a rental property purchased in 2010 for $280,000. RV = $475,000 - and the rent sought is $610/week.
https://homes.co.nz/address/lower-hutt/stokes-valley/7-whitechapel-grove...

Two years ago, that would have rented for $350-400/week. And even now the market range (rent estimate on the website) is $420-580/week. So, what is happening here is that existing investors at this lower quartile end of the market (i.e., those that have held properties for some time) are upping their rent beyond market rate simply because the new investor purchases in the lower quartile end are needing over $600/week just to break even (or even in some cases to obtain a negative yield).

Suddenly, in a matter of months - there is nothing affordable for the lower quartile income household. This is why food banks are under such pressure; the state housing wait list expands incrementally; and accommodation supplements need to be reviewed time and time again.

The good thing is - if an investor/landlord at the lower quartile end of the market would not accept a lower yield under a rent control formula - then selling the property (exiting the business) will mean there is greater opportunity for FHBs to get into the market. AND they won't be out bid by investors who have the tax advantages over these owner-occupiers.

Plus, I'd be really pleased if those investors did exhibit a flight to quality, as what I'm seeing at the middle/upper quartile houses is that investors are prepared to accept a negative yield (as I assume they assume the capital gains will be better).

However, many property investors, such as the one in the link above - purchased there homes at a time when prices were much lower - and so yields will still be there, they simply won't be as high, but still very good even if 100% of the capital paid is borrowed.

It's a cruel world where interest costs are decreasing - while conversely rents are going through the roof. And the most disadvantaged (i.e., those in the lower quartile household income range) are the worst affected.

So, I wouldn't be unhappy if any of those consequences arose. In fact to my mind, they are good/beneficial consequences of a rent maxima.

".... rents are going through the roof"
Rubbish! The national median rent increase over the last 12 months was 12 dollars or 2.8 percent. Apart from a few specific areas as you mentioned Wellington and lower NI rents have been largely stable and close to the rate if inflation or even below the inflation rate in a couple. That is a good result considering the huge transition happening in the healthy homes implementation.

Rents in Auckland up by $13 a week compared to a year ago, while rents in Queenstown are down $114 a week | interest.co.nz
https://www.interest.co.nz/property/108127/rents-auckland-13-week-compar...

I see what you're saying Kate. It would probably work. It might even make it through parliament because the effect on influential people like politicians, RE industry insiders, accountants etc would either be negligible or positive. But it's a band-aid, a market distortion with possible unintended consequences, and it doesn't fix the root cause which kind of depresses me. Why not address the root cause - Nobody wants to hear this but I'm almost certain that New Zealand's smoke free 2025 policy is having a hugely detrimental effect on the underprivileged. It's so easy to prove too - just find out how many food bank recipients have a smoker in the family. The MOH Ernst and Young report from 2017 already showed that over half of smokers are indifferent to price rises. I'm not saying that's the be all and end all but I think it's a major contributing factor. The root cause of the recent white hot housing market is the governments virus response which necessitated drastic action from the RBNZ, I'll say no more..

"over half of smokers are indifferent to price rises"
How many social workers does it take to change a light bulb ... one, but the light has to want to change. Haha. In other words its not difficult providing there is willingness to 'turn' your life

From memory the report said something like "47% of smokers intended to reduce their consumption in response to planned price rises".

Look I agree - self control is all important in life, but if you dig a hole in front of someone who only ever walks forward then whos fault is it when he falls in? There's a reason why tobacco in Germany is 1/7th of the cost of NZ's. The Germans think long and hard about the consequences of their policy decisions.

Abbreviated to "I'm all right, Jack"

@Yvil

"Use all the freed up time not complaining and not worrying about others to improve your own life and take action, I assure you it works,"

Sage advice Yvil .. a lot of venting has been happening on interest.co.nz - it's probably healthy.

MSM outlets have greatly diminished peoples ability to add comment to their narratives. I've learnt lots from interest.co.nz and appreciate their high quality journalism (except form Peter Duune lol).

I rent down here in Christchurch. It would be great to own a wee home: stand alone, fee-simple, city suburbs. I don't really care about furnishings, bric-a-brac and the like - more interested in space; a Huge Livingroom and Bedroom .. Large Office .. Kitchen + Bathroom .. and a Garage so my car has somewhere to sleep. I'd probably go geek and turn the Livingroom into a coding/server hub with my weight bench at the other end LMFAO.

I've been saving and investing consistently for, mmmmm, maybe 6 years .. and it really adds up. I don't necessarily think people have to sacrifice to save and invest. I'll tell you what, when you have savings it's easy to stay out of debt. You just have to start.

I don't quite know way, but I think July onwards, next year might be a good time to buy (in Christchurch). You can pick up houses BETTER than I described above for $340K, you might want to redo-the-carpet, paint walls, sand windows, chuck a new shower in, etc - but it's good value. U wouldn't require much of a deposit for a HOUSE at that price! $350K is less than many people's capital gains.

Maybe Christchurch could be an option for some on here? Australia might be calling to others? Fare is what people pay to ride the bus - that's the only fair I know. "Use all the freed up time not complaining and not worrying about others to improve your own life and take action, I assure you it works,"

15
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Orrsum.. to be fair we cannot really blame people who take advantage of the system. Blame needs to be put squarely at the feet of the people who created the system or maybe more importantly at the feet of the people who have the power to change it but choose not to. We cannot blame investors for using the system (tax free gains, QE unfairly inflating asset prices, accommodation supp etc) to their advantage. We cant blame immigrants who move here for a better quality of life (wouldn't you?).
But we can and must blame the people who can make things right (or at least better) and continuously pile as much pressure on them,constantly question them and generally make them as uncomfortable as possible until they do what is right for our country, especially our young.

Bang on again KS

Are they entirely deserved of the free pass though? If I found a dropped wallet and helped myself to the contents is that OK because I was just taking advantage of a situation created by others - at what point does the social contract come in to play?

Computer... finding and keeping a wallet would be dishonest and no better than theft in my view and I would never do it. But I would not lose sleep over using a free market to take advantage of a situation although I wish the Govt would take steps to protect renters and prevent me and everyone else from doing so.
How would you view a professional poker player whose whole job is to take advantage of situations created by others to relieve then of money they often cannot afford to lose? Do these people have some kind of social obligation to quit the game to help others?

What is the "free market" you talk about. It's a myth...

FREE MARKET ..... please tell me you are joking?

OK. Bad choice of words but my point is we are dreaming if we expect property investors to stay out of the market, to their (perceived?) financial detriment, for moral grounds. Not human nature for the vast majority. We need to have open dialogue about how to ensure we decrease demand and increase supply.

10
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I don't really agree with all that karl - we have a social contract with one another. Choosing to buy a rental and take pay from a young couple trying to save for a house isn't morally right in my view - hence I'm not a property investor...Buying a house when I know there is a shortage for young people while I owned my own is just outright greed - you only need one house to live comfortably. Anything more is excess - especially if people in your community (your brothers, sisters, children, nephews and nieces) are struggling to pay rent and require government assistance just to make it through the week. That is absolutely wrong and that is where we have got to change. NZ'ers are turning into a bunch of self centered wankers (I'll just buy another rental...bugger everyone else) and its a shame to see.

IO... I kind of see your point although a landlord could justify their actions in many logical ways. Unfortunately you will never get everybody to do what is morally right hence the need for sensible rules and laws. When it comes to money most will be totally self-centred . IMO the best way to look after renters saving for a house is to ensure their rents are not increased for a very long time and alter our immigration policies to remove a huge portion of renters competition from the market. TBH, if I thought prices would really double in 7 to 10 years I would buy a handful of rentals tomorrow and not really feel like a bad person for doing so. To give a rugby analogy I guess it is the old Ritchie McCaw conundrum.

I.O.. surely it is easier to get three or four people (Jacinda, Grant, Adrian, KRIS) to change certain things rather than attempt to change the moral fabric of 100 000+ landlords?

It does amuse me given your obsession with a bubble burst. The majority of commenters on this website are unable to view property trends objectively and as a result have all made sub-optimal decisions in the current marker. Adrian Orr has made Yvil rich but equally he could have made you rich also id you hadn't become obsessed with the great debt reset like all the other loony lefties on here.

B727..me? If so, I actually made more money than I will ever need by making optimal property decisions in the 1990s.I sold everything in Akld 6 years ago and (don't laugh) still think that may prove to be optimal also. The system allowed me to become rich without any real type of education, employment, investment knowledge or effort.
The system was wrong and unfair then but is even worse now. It needs to change. Unsure about a great reset but IMO there will probably be some kind of financial calamity this decade and NZ property will be far from immune. Not obsessed with it but am certainly trying to protect myself from it.

So the Uighurs are to blame for their situation Yvil? Seeing as we all make our own life. No accounting for decisions made by others, that greatly impact people, which are outside of their control? Great logic. Since you're looking for a more open minded lot than us, you could always start with yourself and try considering and having empathy for situations other than your own.

It's easy to spout nonsense about us all making our own lives, when you are not oppressed and occupy a very comfortable and privileged position.

It's quite simple Q D, our lives are determined by:
1) external circumstances out of our control.
2) what we think and do with our own lives.
Since 1 is out of our control, complaining about it will not change anything and is a waste of time. So instead, use your time to improve what you can, your own life. We have all been dealt different cards in life, there are plenty of people with various handicaps (financial, mental, socio economic etc) that have done very well in life, there are also plenty of privileged people who have done very poorly in life.
Yes we do indeed all make our own life (with money, relationships, health etc) the sooner you understand this, the sooner your life will improve.

12
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The life of everyone, including yourself, would be significantly worse, if we all did as you suggest and just focused on improving our own lot. What level of freedom would you expect to have, if this view was held by everyone else? Many of the liberties you currently enjoy, exist because people were willing to complain and take issue with something, which given enough pressure, can swell into movements that take action and many of them have changed the course of history.

You conveniently ignore the fact that not everyone is even in a position, where what they personally choose to do, has a significant impact on improving their life. That would screw with your simplistic 'everyone makes their own life' logic too much. You seem to think we have no responsibility towards other people, even just to ensure that our own actions, especially in pursuit of unecessary greed, do not negatively impact upon them.

10
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I wonder if Yvil would have told Jews locked up in camps in the 1940's to make better decisions as well? In some situations during peoples lives, there is little that the individual can do because of the corrupt system that is allowed to take power around them (i.e. they have been let down by other people before them). Much like young people now locked out of home ownership because we've allowed bad economic and social policies to give more to those who don't need it (asset owners).

Yvil to Anne Frank:

'Hey what are you and your family doing locked up in that camp behind the wire?' 'You should have just made better decisions and take personal responsibility then you wouldn't find yourself in such a bad situation'

Anne Frank to Yvil:

'Why did you allow such a corrupt system take hold of our society meaning that no matter what I do, you win and I lose? Nothing I do now can improve my situation - other than to evade and resist the system that you have allowed to take hold and hope that it some how improves...'

Yvil to Anne Frank:

'You should have just been born earlier and lack a moral compass then you could be on this side of the fence. Life is very good over here. Why didn't you make better decisions?'

Godwins Law - you are so predictable.

10
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I'll continue to bat for the underdog - we can't all 'get ahead' and be 'winners' especially if the game has been rigged.

If you take offence to that, well I'm not sure why that triggers you.

TK - have you noticed that Godwin looks like Himmler. Must just be a strange coincidence that he'd think up such a theory (jokes....mostly). Makes you wonder what was brewing away in his subconscious for such a theory to take hold.

https://upload.wikimedia.org/wikipedia/commons/thumb/1/11/Mike_Godwin_-_...

Why would I take offence at any of this, well lazy stereotyping of Maori aside? Godwin's Law is a bit of fun, that the longer a discussion goes on - the more chance someone brings up the Nazi's. You jumped in boots and all!

Haha yes true....does make you wonder what people might do if they are willing to exploit others for a thing like housing during the 'good times', if the times really did get tough. You get glimpses of peoples characters eh in the good times then the nasty wolf appears from the sheeps clothing in the bad. But if you watch closely enough, sometimes you see the sharp teeth of the wolf when the sheep smiles.

Imagine if we could change the mindset of kiwis from the manic 'I've got to buy the next rental' to 'I'll let this one pass so that young couple can buy their first home'. It wouldn't take much but would make a massive difference to the quality of our society and the financial stability of the country. It makes me wonder where this greedy mentality has come from and what it will take to reverse it. Does this make any sense to you?

How is it even relevant that he/she has invoked Godwin's Law? Besides feeling clever for pointing it out, do you take issue with any of the points made?

Lighten up, FFS.

Really IO? Com'on you're really comparing Orr's decision with the holocaust? Really???

Not so much Orr's decision, more the attitudes of those who benefit of one man's decisions against those who do not. One class of people, exploiting another (asset owners vs non-asset owners). The outcome is the same if one group oppresses another.

Humility and good grace always go a long way when in a position of privilege...if not, those who aren't in that position of privilege will turn on you (and hate you) - its human nature. But I'm sure a man of your age and experience will/should know that by now. If not, probably too late for the lesson to do any good.

The points Yvil makes around taking personal responsibility, while a little clumsy occasionally, are absolutely laser sharp. What is privilege anyway, money, a loving family, a rich cultural history? None of my family had the first growing up, but we had the last two in spades and we have all done very well financially. It is often a mindset IO, read your posts over the last 2 years - are they consistent with being a risk taker or a go-getter?

We were telling people to buy property two years ago and got pilloried here.

Is being a risk taker or a go-getter a desirable attribute? I would have thought wisdom and goodwill towards others would by more beneficial to humanity?

BTW I invest in the share market/s and in start-ups - risk profile = high.

Compassion towards others in a rigged system isn't weakness if that is what you are trying to push with your point above.

Should I start going to the property investor seminars (been there, done that) and encourage people to buy houses so that I sound and look like a risk taking go-getter - would that please you and save the (false) judgment/s of a persons online persona? :-)

You are getting way to fixated on the rigged system conspiracy theory nonsense and I'm not pushing any point whatsoever, it's none of my business what each and everyone of us does. Life isn't fair, I'll give you that for free.

Hey Te Kooti - I hope you share my keeness to encourage the use of the macron (at the very least) when referring to Māori. The more of us that use it, the better;

http://otago.custhelp.com/app/answers/detail/a_id/2080/~/m%E4%81ori-keyb....

Ngā mihi.

Ka pai Kate, a very worthy endeavor. I'll have to lift my game!!

And on Android by holding the vowel in the keypad to choose the macron.

Kia pai tō rā

Home ownership rates are falling and inequality is rising (why? QE makes asset owners richer and does nothing for those who don’t own assets). Hardly a conspiracy, more an economic reality. Even the reserve bank have admitted that.

If you’re ok with rising divisions within society because of that, then that’s cool. I’m not :-) Not sure why these opinions threaten your views.

It is the whole idea that this rentier culture that has developed in this country over a number of decades is okay. It isn't

Exactly - but it’s being marketed as ‘getting ahead’ of each other which is a zero sum game.

Could not agree with this comment any more. Reading the above... if you do not follow IO's strict moral code to real-estate investment you are therefore a Nazi?

That was brilliant. I really needed that laugh. It's disturbing to consider what side of history the people expressing these views would likely have been on.

don't worry , not gonna happen , they will print another couple of trillions , and will kick the can further down the road. This is the only thing they know how to do anyway

It would be interesting to revise the banks economists predictions this year, what a shocker they've had.

Nifty
I always find such comments simplistic and are nothing other than massaging one's ego.
For a start outlooks such as this considers only the current factors and making assumptions of possible future developments. Note that it is "possible future developments" - there is no certainty and there is also always the unknown unexpected factors. Such outlooks are outlooks and don't profess to be predictions.
At the start of the year the significance of Covid was unknown and RBNZ's subsequent actions were likewise unknown.
As to the future; what is RBNZ likely to do in terms of OCR? Will there be a further outbreak of Covid and lockdown in New Zealand? What action is the Government to take regarding housing.
Given the uncertainties, economists don't make predictions - they provide outlooks and clearly you don't understand the difference.
There is no certainty in such outlooks. Anyone with a bit of nous will consider a range of outlooks, not blindly follow any particular report, and come to their own decisions.

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printer8
Hold up, I'm still massaging my ego.
I think you'll find a prediction and an outlook to be very much the same thing.
Definition...
Prediction: a thing predicted; a forecast.
Outlook: a person's point of view, the prospect for the future
There is no certainty in an outlook, sure, but we expect with the tools & expertise economist have to get the outlooks right most of the time. It's like a weather reporter. If they consistanty get it wrong we're better off sticking our head out the window and making our own guess.

Given the uncertainties, economists don't make predictions

Does that mean the ol' 'house prices double every 7-10 years' line is just sales pitch with no actual econometric basis? Perhaps what it really means is that the money supply is regulated to a degree that it appears that house prices can be controlled like a puppet on a string.

The money supply in the U.S. has expanded 20%+ in 2020 alone. History has never seen anything like it. The mind boggles as to what happens next.

Prices in Auckland have risen, in any 10 year block you select, from 1992 onwards (no records pre!) by around 75-85%.
But that does not take account of inflation of course.
Key to money supply is who gets it when its expanded and what it gets spent on.
It is mostly going into asset inflation and if workers were getting it of course they would stop expanding it due to the inevitable inflation.
They want inflation to be about 3-5% to erode debt but then of course they would refuse to raise interest rates to protect mortgagees.

OK. Considering there is no historical precedent to explain the relationship between the growth in money supply and hosue prices since the early 90s, we probably need to be careful about managing our expectations as to what actually might happen. The metaphorical NZD1,000 note with Jacinda's face beaming at us isn't as silly as it might seem.

Inflation is not relevant in the price of houses because its not relevant in your wage increase either. Everything has got totally out of step, wages would need to now DOUBLE overnight at least and you know thats not going to happen. My wages didn't even triple from 1990 and so when you also factor in my increased experience over that time, wage growth has been hopeless. Even if house prices stopped increasing right now, wages would never catch up in your lifetime of paying off a 30 year mortgage.

Inflation adjusted house prices in NZ and most of the western world were flat for 100 years until we decided to start this crazy inflation targeting experiment and not including land prices in the CPI. Since then asset prices have exploded (because we keep driving OCR to zero) and we wonder why there is no inflation!

Yet you like to give me shit for not buying a house a few months ago, because prices have gone up x% since then and I'd be so much better off!
You contradict yourself quite often.

Nifty.. when attending parties, presuming economists have friends and are invited to any, I wonder if they admit to their vocation or many feel the need to hide it in order to maintain at least some sort dignity and self-worth. How do they manage to get things so wrong, so often? Really wish I knew some I could gamble with.

Economics isn't an exact science, it's only sold that way.

Comment of the article. Witch doctors, and palm readers and snake oil salesmen and bankers and economists.

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First people need to understand this is not a party anymore, this is some serious hyperinflation issue caused by monetary policy and banks lending more than they should into an already overheated market, which is causing a lot of pain and frustration and cannot end good if we continue the same direction.
Unfortunately our leaders are totally blind and either ignore their responsibility or show a glimpse of empathy to then show a total lack of action or hide behind lame excuses about similar issues happening to other (few) countries which leaders also chose to do nothing.

People are hedging against RBNZ policy by buying property, that's essentially happening now. It's a run out of the banks into houses. Mr Orr even encourages it, saying "People need to find alternatives to bank deposits and just keeping money in the bank"
....and this is the result.
The real economy will stay as is....or start failing. Brilliantly unsophisticated thinking from a man that prides himself on his robotic repartee.

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Replace the RBNZ board with the Teletubbies. Surely they can't be any worse and at least they will make us smile.

Abolish the RBNZ completely. Free the market.

What we have is as free as a market can get hence the predatory behaviour of capital. And as much as I disagree with the figure of the RBNZ should we remove all regulations, as your comment seems to suggest that would not make things better but even worse.

that would not make things better but even worse.

In the short term yes. Eventually everything would collapse. This is necessary to "make things better."

The OBR is the opposite of a free market. There are no perceived consequences anymore for governments and businesses that are too big to fail.

The big picture:
1. people in the developing world are getting rich
2. people migrate more
3. lots of $$$$ get printed in both GFC and not even after they have been fully digested, a new and even bigger round of $$$ print took place because of COVID
4. NZ has been a desirable place to live and depending on the immigration policy and political will, NZ may be still a desirable place to live in the next 20 years

so......

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Duh - it's desirable mostly because of its low population, which is being quickly eroded by mass immigration

You could double NZ's population and we would still have a low population by international standards.

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Well why the heck don't we have a referendum on the population then. I don't know anyone who wants our numbers doubled, regardless of how that compares to the rest of the world.

I wouldn't mind the population doubled, there you go, now you know a person who wants the population doubled Njay

Funny. Why, can you elaborate.

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Because he owns properties and more people puts the prices up. Greed rules his thinking. Simple.

To get more open minded, worldly people than you lot

What if you do and they're worse?

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A lot of open minded, skilled and indeed wealthy people have come to NZ due to it's relatively low population.
Mass , low skilled immigration is spoiling the goose that lays the egg.

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I would like your comment twice if I could.

I'm another that wouldn't mind the population doubled. I've lived in larger more vibrant cities overseas and it's fantastic, as long as infrastructure investment keeps pace (which is where we've been failing miserably, especially under Key).

I agree. The problem with infrastructure keeping pace with population growth is those in-charge either can't do it because of incompetency and laziness or don't do it because of their vested interest in turning a quick buck on keeping supply low and demand high for essentials.

We've known about structural issues in ramping up this supply like supermarket duopoly, inadequate public spending, RMA, apprentice training, etc. for years but waited for a one-in-100 year pandemic event to do something about them.

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Ugh, accidentally reported. But why make NZ like every other place on earth? Those places exist. Many who have the time to trace back their ancestry find their relatives left Europe and the like to get away from the megacities and into a place with wide open spaces. If people love other places for their vibrancy, then they're free to go to those places. But adding more and more people to NZ until it becomes like everywhere else would be a giant waste.

Yep, well said.

TheTor.. but more people is not fantastic because we are not keeping pace. Once we can provide ample housing, water and employment for all our citizens I would welcome millions of migrants with open arms. Yes, vibrant cities are fantastic as long as the cost to those already here is not prohibitive.

Italy is a little bigger than NZ and has 60 million people, there are endless, beautiful areas in Italy that are not overpopulated at all, so I think NZ can comfortably accomodate 50 million people

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Ah yes, Italy, the land of opportunities

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Rich people like you can move to the nice unpopulated areas so YOU will be ok. The poor will not be so lucky and will be fighting for jobs and accommodation with the masses. The rents will go up and the wages down. I wish you could see it from other peoples point of view but you seem incapable. Just like all the other "I'm alright Jack" kiwis.

Can you not see that you are rich Orrsum? You clearly have an internet connection and a device that cost many people many month's salary. I assume you also have a permanent shelter and you can go to a supermarket with endless choice of food to buy when you're hungry. You're better off than of hundreds of millions of people. Now focus on yourself and have a great life

focus on yourself and have a great life

A very worldly outlook. People talk about hell being fire and brimstone, but having no empathy for others is all that's required.

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Have you ever been to Naples? 3 generations of people living in a tiny apartment in poverty. Mafia rule.
I get it that you find pleasure by disagreeing on every comment with a rebuttal. But ignorance and petty comments undermine the value of this website for all.

Do you think the mafia is the result of a high population?

Well corrupt governance tends to be an artefact of large population bases, along with distant, unaccountable politicians.

You come here to learn?

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I find the constant whinging and moaning by many on this site very tiresome. A few years ago Interest's comment section was full of people with experience in property that were willing to help each other and learn from each other, now the posts have turned into complain and blame, a real shame.

It was nice knowing you. Goodbye.

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I've heard a tiny rumor that the property market is now causing substantial negative impacts on the lives of many New Zealanders, and there are many people unhappy about the current situation... Maybe this is why people are talking about it so much?

On a more serious note, I understand that you've invested in property and done well for yourself, but your gains have been to the major detriment of the young and seemingly NZ's long-term social cohesion. This is becoming more apparent every year this fiasco is being propped up. I know you're viewing these matters from a purely 'investment lens' but this issue has now become larger than that due to all of the externalities caused from this. If you want to pat yourself on the back or brag, you could try a specific property investor forum or property investor Facebook groups.

In the meantime you could try and be a decent human and show some empathy and respect for the people who are facing uncertain futures as a result of this short-sightedness.

A class of Nz'ers who are completely out of touch eh and no matter how you try to put it to them, its a brick wall....'just do what I did you can be as rich as I am - but that might require a time machine so that you buy your first house around 1975'.

Seems to be a universal: elites start to live in bubble reality detached from the increasing hardship of the common man, discontent towards the elites increases over time, eventual revolution happens, elites are punished then lament they 'never saw it coming'.

Yeah they act like ignorant w#@$@ then wonder why people dislike them. 'What did I do?'

You try and help them with a few lessons on self awareness and humility but they don't want to know anything about it!

Oh well - at least if the pitch forks come out I've tried my best to give them a heads up.

The only complains I have read around here lately are yours Yvil, not about the social issues that are happening around us but about those that have an open mind and are able to see what's going on. It is pretty sad to be honest.

There are many facebook groups that are landlord circlejerks, perhaps those are more to your liking?

Well you add very little to the site as well Yvil..eccept ego massaging

…and proper spelling, it's "except" LOL

It's a syndrome known as ODD... oppositional defiance disorder. Lots of kids at school have ODD.

Italy's great for a holiday, but I wouldn't want to live there. City life extracts $$ for anything and everything. Even going to the public toilet costs money. NZ's low population density is a huge asset, that and the fact that we we're the last country to be occupied by humans.

I love that Aotearoa has a low population and open spaces. I don't want to be like Italy or live in Italy. Aotearoa is my culture; if you are born here, you are mana whenua. If we got to the population of Italy, then it would be a threat to my culture and leave me homeless in a country I wouldn't recognise. If you like Italy so much, I'm sure you can go there to live. I, and my family, have nowhere else but Aotearoa. There seems to be little respect for that from a lot of people wanting our home to be like everywhere else. Continued mass immigration is cultural genocide.

Been to Naples, Milan or Rome in the last 10 years? Like what you saw? I didn't.

Been to Tuscany, Amalfi coast, Italian Riviera, l'ho amato moltissimo

And? Population as a number is meaningless without consideration for infrastructure, lifestyle and living costs.

You wouldn't happen to be from Wellington, would you?

I don't know how someone living in a city that is unable to drill another hole in a hill for decades would likely benefit from population increase.

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International comparisons don't mean anything when we are struggling to accommodate 60-70k arrivals a year.

We brought in more 'skilled' workers per capita than any other country in the OECD over the past decade but our GDP per hour worked (productivity) was lower in 2019 than in 2012.

We clocked lower economic output per hour than Turkey, Slovakia and Lithuania in 2019.

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It seems we are hellbent on ruining the sparsely populated paradise by intentionally overcrowding NZ for GDP figures

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Totally agree, and in response to Yvil, I've travelled the world and are very opened minded and don't really enjoy insults from someone who doesn't know the slightest thing about me. We are all entitled to an opinion. I'm not against immigration at all. It's just been completely out of hand the last decade as mentioned above. Lets just reign it in somewhat. Also, we as citizens never seem to get a say in how many people are allowed in as the politicians seem to know best.

Your last sentence sums it up. It's supposed to be what's best for all of us long term, and it's evident it's not with all political parties refusing to address housing and immigration.

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I prefer quality over quantity

Exactly.
Much of the quality of our immigrants, as witnessed in some of the commenters here, leaves a lot onto be desired

I did some survey work around Auckland and the number of international students here doing 'cookery' courses was notable. All those soft student visas have to live somewhere.

xing... so in answer to number 2... don't them them bloody well move here! Why do so few people totally ignore the demand side of things?

Xingmowang, it's time to get some updates now. New Zealand is not even in the top 10 countries most people want to move to.
https://www.dailymail.co.uk/travel/escape/article-8981213/Map-reveals-na...
The overheated housing market is not due to large number of kiwis coming home, it's because lower interest rates, no LVR restriction and FOMO.

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As I have said a few times: this (last 4.5 months) was a period of mania similar to mid 2014 to mid 2015.
This was due to two factors being driven by low rates and no LVR. The two factors are past (held up, pent up demand) and future (pulling forward consumption from future via incentivising greater debt). Both factors are number and time limited, in terms of force and duration. As in, not linear and cannot be sustained, particularly when dependent on controls (continually cutting rates) which cannot be held constant. The sugar is wearing off. Next hit will not be forthcoming. Housing market in terms of sales still is about 16% below 2015 in Auckland. It has peaked for now, at about 26,000 pa sales, for whole year 2020. Next year is going to see a world wide recession worsening from mid January due to contraction in USA and China slowing imports. Printing money does not make workers better off, hence consumer demand will decline, hitting jobs. Lastly, in NZ it seems to have been forgotten, or rarely mentioned, that the greatest economic hit will be Jan-March (tourist season) as no foreigners spending money + relief for mortgage holders expiring. So, for last 4 months we have been in a bubble fo a different kind. Now, with usual delay for economic forces, the reflationary impact of government support is draining away. In respect to listing by the way, Auckland listing per day peaked on November 5th at 256. The 6 day average a couple fo days ago was 173. Some days it is more and less but the trend is falling. In normal pre CV19 years, listing did not fall til December 10th at earliest.

FUTURE DEMAND BROUGHT FORWARD should be highlighted more. This is like when Noel Leeming has that yearly clearance and makes it easier to purchase by introducing interest-free credit card (used to be Gem Visa, now Purple Visa). Voila - artificial demand made instantly available! But there is only so much pulling you can do until it is all stretched out. Regular people with regular incomes have set money coming in. They will still have to pay back that credit card when it is due every month.

I really think the Reserve Bank panicked by lifting LVRs when they did, because they wanted to make sure that there was no drought of available buyers when the forced sales were predicted to happen in September. But because the wage subsidies and mortgage holidays were extended, suddenly you had a boatload of buyers with a limited supply of housing. Obviously, prices went up because the demand was brought forward when it wasn't actually needed anymore. So now with LVRs reinstated and unemployment set to rise in 2021, we're suddenly gonna see an oversupply of houses with an underwhelming number of available buyers, which will force house prices to drop.

The saving grace is this will happen the same time as the Housing Market Crash in the USA, so this will be blamed as a global event rather than a failure of both the RBNZ and the Finance Minister. Notice how they have been playing hot potato and blaming each other? They're just passing the parcel until the time runs out.

Removal of the LVRs has brought forward future demand for housing into today, which as we have seen has pushed up prices even further. Cool. So what happens when we reach that point in time where current demand previously resided?

Excellent question: unless you get another hit, you get an air pocket (or vacuum ) Then you get stagnation (a la 2016-19)

And negative sentiment.

Yet if supply was allowed to meet demand in developer real-time, then it would have absorbed this little rush without causing this price spike.

And then the same for a sales dip, would not have caused prices to fall as developers would only develop to meet that demand at any one time.

Prices remain stable only increasing with the nominal rate of inflation and always staying at approx. 3x median household income.

Bank economists only say what they want people to believe. Saying this takes the heat off RBNZ and Labour to change anything.

Galbraith once there are two types of economic forecasters - those who don't know and those who don't know they don't know. 2020 has proved that beyond any shadow of doubt.

Better not slow down, selling houses at increasing valuations to each other is a lot of our economy at the moment. I have no doubt that if house prices fall they will drag CPI with them (given the extreme level of household debt in New Zealand) which will cause RBNZ to resume credit creation measures.

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If housing costs fell, then maybe working people could have disposable income that would support GDP. In fact historically, the strongest economies have had a large and healthy middle class. Right now, all the money is falling into fewer and fewer hands.

The narrative that high house prices are good for the economy has been the biggest lie that landholders have managed to convince people of.

Indeed a critical point: demand is depleted as inequality grows. particularly where productivity grows faster than average wages.
This has pretty much been case since 1975 in USA, NZ, EU.
This means debt had to be made cheaper to make up for wages in real terms, falling.
When debt cannot get any cheaper, there is a big problem.
Multi-nationals moved lots of production to China and Mexico to get profits to stay up and prices down.
Prices have to stay down for consumer goods, if wages not rising.
All of world left for multi-nationals to get cheap labour from now is mostly in Africa and S America, which are not so easy to invest in.
So, stagnation has set in, in GDP terms, outside of China, since 2009 (ie GDP growth under 2.5%)

We were sold the pipe-dream that offshoring 'dirty manufacturing' would enable us to transform into post-industrial, service-oriented societies while retaining high-wage work in our new, evolved economies.

What most people didn't understand at the time was that the fate of high-paid service jobs are closely-linked to manufacturing activities. In central Europe and North America, industrial blocks are often located within close proximity of cities, being large consumers of high-end services.

Closer to home, I doubt the likes of Schlumberger would maintain their engineering operations in New Plymouth without O&G activity in the region.

Manufacturing is not viable in NZ due to us being an exceptionally high wage economy.

And yet they're viable in other high wage countries (e.g. Germany, Switzerland, UK, Australia).

That's because we threw the baby out with the bath water by culling funding for R&D and apprenticeship training in NZ.

The decline of manufacturing in our economy coincided with the rising share of tourism, housing and agricultural exports. Investors and workers began reaching for the low-hanging fruits instead of putting in the effort and resources to build hi-tech businesses.

FYI in 2018, Tesla estimated labour costs (direct and indirect) per car produced at its Freemont factory at only US $3.2k; a small amount considering the average wage of a Tesla factory worker is around US$67k. As the company champions its know-how and scales up production, automation and research, that unit cost is supposed to come down even further.

We aren't high wage, we're just unproductive as hell for the wages we pay.

The definition of insanity is doing the same thing and expecting different outcomes. Interest rates will remain low, the housing shortage will not resolve itself any time soon (as soon as the borders re-open late next year migration into NZ will soar) so house prices will keep rising. This is no different from the 2002-2008 or 2012-2017 cycles, prices go up a lot, then they stagnate for a while and then comes the next upswing.

ONE major difference: now they cannot cut rates any more

I thought you were better informed, not only can they but the RBNZ has already signalled they intend lowering the OCR into negative territory next year. Also I'm surprised you don't know about the FLP which will be implemented shortly with the clear goal of lowering interest rates

Yvil is quite correct RBNZ is preparing to change bank funding so they no longer need to rely on deposits. This is to send the rate lower. They will run the rates lower until financial instability shows up as a result.

Seems legit

Plan. If they do it Bank’s will not follow suit. They are watching profit collapse already? Don’t think Mr Orr is going to reduce to negative esp since this just aggravates deflation. Plus Robertson will be on his back again. As for informed? I note that this v week economists have said spat with gov has taken negative off table. So no more sugar hits to keep your game going - ie getting people to spend longer and longer paying off debt

Oh yes they can...

"The definition of insanity is doing the same thing and expecting different outcomes"

Like decreasing interest rates and hoping for consumer price inflation?

There's never been a housing shortage, only a shortage of affordable homes. Even the prophet Ashley Church has made this statement.

This.

Yvil... why do we need to accept that migration will soar? It is the easiest of the major contributors to the problem to fix..

We don't need to "accept" that immigration will soar but give recent past history, what do you think will happen when the borders reopen?

Yvil... I am hopeful that if enough people question this madness the Govt will at least lower the numbers at some point. But then I am an optimist

You really believe borders will be open at the end of next year?? That may suit your myopic narrative but dream on.. Covid is surging, mutating and at all time high numbers globally. We've got years of this ahead. And mass immigration would make the current housing and employment situation untenable.

Hi Greg Ninnes,

'The question is how long this raucous party can go on'

The party can and will last as is not based on economy fundamental but is as artificially proped up by Mr Orr and Mr Robertson and both have made it clear that the only solution and answers they have is to push the ponzi to a limit that even if it falls by slight now, speculators will still be safe at the cost of average Kiwi and FHB, WHO ARE AND HAVE BEEN ALREADY SCREWED.

Even now both Mr Orr and Mr Robertson are not taking any action BUT only talking putting fuel to fire as many will rush to use the window opportunity given SO no action and even their sound bytes, which is suppose to show concern and help FHB is in actually adding pressure on demand.

If want to shoot, shoot don't talk

The party will go on... just needs more cheap debt and a hundred thousand immigrants a year.

Has anyone else noticed that Yvil only posts comments when Mike Hosking is not live on TV?

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Come to think of it, I've never seen both of them in the same room together either

Thanks for the compliment Orrsome!

The fact you take it as a compliment shows just how out-of-touch you are. Although I can see how being called an out of touch worn out shock jock might be a step up for you.

Thanks for the compliment Prgmatist

Jesus - could you be right? See:
https://www.interest.co.nz/news/106380/review-things-you-need-know-you-g...

by frazz | 5th Aug 20, 5:46pm
John Key and Mike Hosking..2 people that I never will take advice from

by Yvil | 5th Aug 20, 6:42pm
Because… they are both prominent, successful people? Do you rather take advice from an unknown, broke person?

The greedy kiwi investors can best be described visually by watching the scene in World War Z where the zombies all trample over each other to reach the top of the wall. They are inflicted by the kiwi greed virus and there appears to be no cure.

Orrsum
I hope you have a better weekend.
I suggest you should go outside, take some deep breaths of good fresh air, look at the clean blue sky, smell the wild flowers, and look around and appreciate all the beautiful sights. All quite possible in Gizzy this weekend.

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I am looking at flights out of here as we speak. I will be leaving soon thanks to Adrian Orr so please excuse me if I sound frustrated, but I am. I have elderly relatives who I may not see again because of this nightmare Orr has created. But I am happy that the rich have been made richer. It's only fair after all. They are more important.

Interest.co.nz the Soap Opera.

Orrsum
Not sure where you are heading but I suspect that where ever you are, you probably will find things just - or somewhat more - tougher. Don't know of too many other countries where one has a better quality of life, opportunity and is looked after as well, so I wish you well.
Sad to see any Kiwi go, but all the best and bon voyage.
Cheers :)

Unfortunately Orrsum will find things hard and tough wherever he goes until such time he starts to understand that his misery comes from within. I honestly hope he will learn to stop blaming everything and everyone around him and start to focus on what he can do better his life

So its my fault Adrian Orr pulled his levers and put house prices up 20%? Silly me I didn't realize that.

It's unfortunate you just don't get it, "poor me" and "it's his fault" won't help you, I hope in due time you will come to see that

What is unfortunate is the lack of empathy, compassion and concern for other members of a community - that is what makes societies worth living in.

Your blatant lack of empathy, viewing others through an instrumental lens and use of denial as a primary defence.. won't help you either. It's rather serious in fact, though I doubt you will ever come to see that.

I read Interest for its great articles, I don't comment here for "thumbs up" "empathy" or get upvoted (clearly). I prefer my friends in the flesh with a beer in hand

You might want to consider taking your own advice, and stop complaining about all the 'whinging' that you don't care for.

XD

Yvil
I understand his frustration but blame shifting - especially to people such as yourself - but it achieves nothing other than falsely justifying and entrenching an anger.
As for this ANZ report, I posted some three weeks or so ago that I see current house prices being unsustainable and see a long flat period (with possibility of a little downside) in the market middle of next year.
Already interest.co has reported that affordability for FHB has improved and this is confirmed by RBNZ's number of mortgages to FHB being at record levels for the past three months. As a consequence I see affordability increasing next year.
However, here we are in the middle of the Covid economic storm where people's jobs are at risk - or already unemployed or on reduced hours - businesses facing considerable difficulties and retirees see their returns on their term deposit nest-egg all but disappear and we have Orrsum throwing a tantrum "Poor me, poor me, poor me".
Yes we are in unusual times, the effects are not as great as expected although it has affected house prices and FHB, but the outlook is promising.
The problem is that most young people have experienced a fairly strong economy for past decade - that is their only experience. You will be well aware that this is not always been so.
As for Orrsum; sorry son, no sympathy - just a little of tough-love reality.

I watched a superb David Attenborough documentary last night. It was all about how parasites generally stick together in small groups and once one starts biting lots of others join in the fun. One telling thing David said was that parasites don't actually realise that they are parasites. He is such a clever man.

Delphic. Why can you not just stick to argument without personal argy Barty?

I will be mortgage free where I am going which I cannot be here thanks to the obscene 20% increase you have just gained tax free on each of your properties. So life will be easier, missing loved ones will not. But I don't expect you care about that. Obviously the only person you care about is yourself.

Really pleased for you Orrsum. Good to see you make a decision that is best for you and I genuinely wish you well.
Just ensure you pick your toys up before you leave.
Cheers :)

I'm imagining another young person leaving the NZ retirement village, catching a glimpse in the rear-view mirror of a bunch of early retirees in brown slacks giving him the finger and holding up "Wishing you well, Loser!" signs.

They haven't done anything meaningful on housing in the last 10-20 years - no one in government wants to tackle the elephant in the room
Most of the policy makers are also home owners or investors, so given the inherent conflict of interest it is unlikely to become a priority

it has been stretched by international standards for years, and the govt is simply stalling action by playing the blame game with the RBNZ

The RBNZ cannot fix housing alone - and the drivers of housing costs are mainly under the governments own control i.e. immigration, foreign cash restrictions, rules around hiding assets in various shell companies/ trusts etc and the RBNZ can help with lending restrictions to reduce leverage...

Time for someone to take accountability for what they control

Maybe its just a plain ole run of the mill 'pump & dump' scheme in play? The RBNZ and the Govt are in cahoots?
The RBNZ's objective is to inject as much capital into the market as quickly as possible before the tide turns and the government wants a good set of accounts to show everybody that they dodged the covid bullet this time and by then the housing market should have cooled down? Maybe?

Do you include political economists in that statement? If so I beg to differ eg Mark Blyth.

When everyone is talking about housing bubble / extreme - Why is government or anyone not acting on it.

TRUTH IS COUNTRY IS RUN BY BIASED VESTED INTEREST PEOPLE - BE IT POLITICIANS OR BREAURCRATS OR SO CALLED EXPERTS ( MANY ON PAYROLL BY STRONG AND POWERFULL RE INSTURY) OTHERWISE WHY IS IS TAKING THEM TIME TO ACT INSTEAD OF TALKING AS HOUSE PRICE TO EVERYONE KNOWKEDGE IS GOING UP ON A DAILY BASIS AND NOT MONTHLY OR WEEKLY.

WHEN FEAR OF HOUSE PRICE FALLING - EVERYONE BE IT MR TOBERTSON OR MR ORR CAN ACT SWIFTLY WHAT IS STOPPING THEM NOW ?

Um - what may be stopping 'em is a Plethora of Upper Case....

On the contrary. The anger behind this use of uppercase, which continues to be ignored, will eventually be converted into feet on the ground. If those in power had any sense, they would be paying very close attention to signs like this, and start trying to do the right thing, if only to save their own skins from the avalanche of discontent that is headed their way.

I think you're right QD.

When does the rent strike begin?

Look in the Mirror People .. we only just had an ELECTION.

Many have the government they deserve, the rest of us voted for TOP and/or ACT.

"Zip it Sweetie" comes to mind. In the interest of moving forward, MANY here need to confront their dereliction of civic duties.

ACT. The pretend libertarian party.

Labels are for cans.

Comments are 100% predictable.

1. Property market bubble is/has burst.

or

2. The property market is an unfair ponzi scheme.

Very sad that commenters can't see past their own biases to provide a better lifestyle for themselves.

What is sad is the lack of humility and empathy towards other people - it’s self centred thinking that creates these problems :-)

Everyone buying more houses isn’t the solution to this.

People have forgotten it's our export market that makes us rich. This import experiment with immigrants is coming to an end in the short to medium term as macro economics takes over. Just focus on making your household export productive. In time with patience the specuvesters will be financing your new BMW that you buy in a fire sale with cash, but they paid for with finance lent based on their equity. Cash flow is king, and all the baubles will be up for grabs as equity bleeds out and the people who have let greed dictate their decisions try desperately to remain solvent.

I can't believe how inept Jacinda is. She said that the housing issue is an issue of first home buyers not being able to save enough for deposits, which is only half true. But mostly do you think house prices going up 20% a year is healthy? Also she wants to bring in a tax on higher income earners but not capital gains or property investor related taxes. That incentivises people to pull out of the productive economy and contribute to the housing bubble because it's tax free. Way to to you utter terrorist.

"also she wants to bring in a tax on higher income earners but not capital gains or property investor related taxes".
Yes, let's punish the productive economy and convert it into a gigantic real estate Ponzi!
Well done Mr Robertson and Mr Orr, you keep exchanging BS letters to each other while the financial stability of NZ goes down the gurgle.

Exactly right, they can't seem to understand income inequality in NZ is one thing, but wealth inequality is entirely different.

Guess what Jacinda and Grant, what you are talking about when you say "inequality" is WEALTH inequality, you can't fix this by trying to make INCOMES more equal. Why we keep voting in idiots is beyond me...

No, the housing market will not cool down: like all Ponzi schemes, it will keep inflating until it crashes.
And when it does, the RBNZ will have nothing left to inflate it any further, with a ridiculously loose monetary policy already in place. Enjoy the party until economy reality comes knocking at the door. Well, at least, when this happens, it will not be with my money :-)

Running out of the banks and into housing would be a thing, if people were purchasing straight. But they need the banks for the low interest mortgage, so it's running from the banks through housing back into the banks. How do you reason that?