ANZ Bank's economists expect annual house price inflation to hit 27% by June but are warning that current conditions won't last.
In a New Zealand Property Focus report headlined "Nothing lasts forever," ANZ's economists said house prices had been rising "at an alarming pace," fuelled by easy financing conditions.
"A number of factors have supported the recent run-up in house prices, but a key one has been very easy financing conditions," the report said.
ANZ is New Zealand's biggest home lender with home loans of $89.544 billion as of September 30 last year.
"Record low interest rates have boosted demand for housing and credit, and resulting price pressures have been exacerbated by very tight supply in the market.
"Meanwhile, abundant bank liquidity, particularly as a result of the Reserve Bank's Large Scale Asset Purchase Programme (sometimes called quantitative easing), has ensured that credit supply has also been readily available to meet this demand."
However the report also warns that the current situation is not expected to last.
It says that interest rates are expected to rise, with longer term mortgage rates expected to start rising first.
"This is expected to to pass through only very slowly to costs faced by borrowers, but eventually, debt servicing is expected to become more expensive," it said.
And mortgage availability could tighten.
"Abundant bank funding has ensured that credit growth has been readily available to meet demand, but slowing deposit growth, bank caution and policy changes are expected to see credit conditions become more of a constraint," the report said.
"Eventually, these factors, alongside affordability limits and other headwinds, are expected to see a slowing in the housing market, though the timing is uncertain and conditions are expected to tighten only gradually."
The report also warned that while changes to mortgage interest rates would be gradual, households "need to prepare for the possibility that a greater proportion of their incomes may need to be directed towards mortgage costs in time."
The report said it would make sense for borrowers to fix at least part of their mortgage for a longer term rather than a shorter one, even though that would likely mean paying a higher interest rate initially.
ANZ's full NZ Property Focus report is available here.
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103 Comments
Expect lot fewer sales if this forecast is accurate
All of them proven to be wrong in 2020, with govt assurances of at least 4% regular increase? - one would feel, the statement is for scaremongering.
NZ won the cup, vaccine deal has been sealed... border with OZ open by April 2021 (estimate), followed by general NZ border (estimate end of 2021)
We could have 0% house price inflation going forward and still see an "annual" rise of 27% for the year to June. Bit of a convenient prediction.
Good to see some doom and gloom on the way.
Not if you own silver and BTC and brought in the last 4 years. None of the intelligent minds here told us? Why continue to listen to this? Give us something to naw on? Decentralized finance is the future.
Inflation of 27%
How fast governmemt has got comfortable with price rise of 27% annualy.
Government if serious would have treated and acted as in emergency.
Real Shame.
Government and RBNZ attitutes :
Last year in April just a possibility that house prices may fall by few percentage was an Emergency and overnight both acted as Jacinda Arden says - Act Fast Act Hard
Now
When house price rise is not a possibility but a reality that it is growing by 10% monthly and overall by 50% in few months, still.....
Price fall possibility by 5% is an emergency but price rise by 50% whixh is a reality is not.
AND
No words from The Queen and.....
Experts opinion on this discrimination is welcome to understand....
Prices rising 50% in a few months is not a reality, it's your prediction based on extrapolating a single month.
They are clearly comfortable but a step beyond that _Grant Jacinda and Orr have worked hard to allow this bubble. The tinkers they have planned to announce next week are a joke
Genuine question... your thoughts as to what the tinkers might be? I put mine forward a few days ago.
From what's been suggested in the carrot and stick article it seems brightline extension which will be counterproductive. DTIs are being discussed but I don't see thst taken up, just discussed to make it look like they're trying. Making home loan interest non-deductable sounds solid in theory but am expecting it'll be implemented at tinker-level - a percentage still deductable and won't come into effect for donkeys ages. If govt were serious they could bring in a Stamp duty like other countries, for investment properties
Every day govt does nothing and talks tinker, every day the prices are looking more like a lotto win for a potential seller and a lifetime debt enslavement and massive risk for buyers.. Truly disastrous state of affairs Labour has allowed and encourged for the past whole year
I'm not so sure. Climate Change was deemed an emergency and not much happening - even the small things like plastic straws, plastic produce packaging, plastic cutlery, etc are still being used. I don't know what it takes these days for the Govt to act, but it certainly doesn't help calling something an emergency.
Labour doesn't have to do anything thing then, it will all sort its self out...*yeah right*. Interesting all the banks are coming out before the Govt announcement with the same rhetoric.
Get out while you still can.
....Then you lead ;)
not a great idea.
If you sell your investment property and pay off the mortgage and get 1M cash in hand, where would you invest?
There are no safer alternative investments.
Plus, there is a high possibility this crazy house buying will go on for some time, and you will find the property you sold for 1.5M selling over the 2M range.
I tried making this point on this site earlier in the week, ie no where else to invest (shares, nah; bonds, nah; TDs, nah), and was told to go start a business. LOL
Too much protection of labour makes the risks associated with a new business where you aren’t personally handling day to day operations far to high to be worth while for most people.
“ It says that interest rates are expected to rise, with longer term mortgage rates expected to start rising first.”
Does anyone actually expect rates to rise in any substantial way? To service our debt we need ever increasing debt and that can only be achieved through more lending made affordable by even lower rates. Has been this way since the early 80’s. If rates raise enough we will enter a recession and seeing how successive governments have pushed housing to stave that off previously I just can’t see it.
My feeling is that interest rates will increase but only in tiny increments. Like going from 2.29% to 2.35%.
Rather than seeing the interest portion of your mortgage reduce over time, the interest dollars will remain static over the life of the mortgage despite paying down principal.
Is that a problem for you?
Not for me no.
That's right. It's all about serviceability (see below). I pick 2yr as that (until recently) was the favored term of NZ borrowers and I picked $350k as that's the average residential mortgage size (trust me) and so picked $700k as it's simply double (more reflective of current day new entrants).
Scenario One: Current 2 year rate increases 100bps from 2.59% to 3.59%.
A) I have a $350k 30yr mortgage.
My minimum fortnightly repayments will go up by $87 from $646 to $733.
B) I have a $700k 30yr mortgage.
My minimum fortnightly repayments will go up by $175 from $1,291 to $1,466.
Clearly it's desirable to owe less money to the bank. Finding an extra $175 per fortnight might be a tough ask for some who are already stretched at 2.59% but lets assume most can cover. Now lets look if rates went up 200bps or 400bps keeping in mind that the average 2 year mortgage rate was 4.59% in March 2018, that's only 3 years ago so don't for one second believe that it is impossible, and the average over the last two decades since the year 200 is over 6%.
Scenario Two: Current 2 year rate increases 200bps from 2.59% to 4.59%.
A) I have a $350k 30yr mortgage.
My minimum fortnightly repayments will go up by $181 from $646 to $827.
B) I have a $700k 30yr mortgage.
My minimum fortnightly repayments will go up by $363 from $1,291 to $1,654.
Scenario Three: Current 2 year rate increases 400bps from 2.59% to 6.59%.
A) I have a $350k 30yr mortgage.
My minimum fortnightly repayments will go up by $984 from $646 to $1,030.
B) I have a $700k 30yr mortgage.
My minimum fortnightly repayments will go up by $769 from $1,291 to $2,060.
The above scenarios show the increasing vulnerability of borrowers the greater the notional amount that they borrow. The more we're forcing owner-occupiers (specifically FHB's) to borrow as they're forced to compete with investors who have equity, the more vulnerable we're making the system to even the slightest increase in interest rates. The RBNZ knows it so they're choosing to keep interest rates artificially low to ensure financial stability but in reality they're actually making it more fragile. Blowing more hot air into the bubble to protect borrowers is just creating more risk and killing those not already in housing debt. I just feel sad for NZ.
Your fortnightly payments go to $2600 if you have to repay principal too.....good luck with that!
Your numbers are based on interest only and never repaying the loan.
Effectively you are insolvent... with 80000 other ma and pa schmucks.
Scenario one A... increase 40ish per week B increase 85ish per week
Both families are currently on low low interest rates and saving plenty into their sharesies accounts for a rainy day.
withay
"Does anyone actually expect rates to rise in any substantial way? . . more lending made affordable by even lower rates. Has been this way since the early 80’s . . . ".
Not quite so.
RBNZ mortgage data:
August 1999: 6.5%.
August 2008: 10.88%
Interest rates rising by about 4.4% or equivalent of 67% of 1999 rate pretty substantial.
Most FHB mortgages are now pretty big and even 1% rise on a fairly modest $700,000 mortgage over a few years years is pretty substantial - $270 a fortnight would be substantial to most household budgets.
However, each to their own but I could see RBNZ raising OCR and consequently mortgage rates by that amount to slow housing inflation.
P8..IMO the RBNZ will fight tooth and nail to avoid raising rates but I doubt it is a fight they will win (in the end).
karl
Agreed: they are not going to want to raise rates to the extent that it is going to negate their actions to date which has been all about directly and indirectly supporting the economy in these Covid times.
Post-Covid with return of economic conditions to "normal" there could be good reason for raising rates to help slow the housing market for economic stability reasons. However, as best as they can, they will not be wanting to see a housing bubble burst.
There will be differing opinions as to likelihood of RBNZ actions but one needs to consider their possible actions and the implications that they pose - especially recent FHB with large mortgages.
P8...agree. Any significant rate increases in the next year or so could (or would probably IMO) be catastrophic for our whole economy.
That's the thing. Put simply, if Interest Rates need to go up there will be a reason or driver. Orr won't get up one morning and think to himself "oh should I raise interest rates today?" and then after some consideration decide no because people borrowed a whole lot of money.
Nzdan..agree. The OCR has serious implications for our whole system especially now and therefore, I believe the reasons or driver to raise rates (in the next year or so) would need to be so strong that they pretty much had no choice. I think when/if the economy improves in a year or two they will be far less reluctant to raise the OCR.
While IMO low interest rates is the main driver of our housing crisis I agree with the Govt and RBNZ position on (trying to) keep the rates low (till things improve anyway) and that is why I have been so vocal on what I perceive to be the second biggest contributing factor. to the housing crisis. It would be easy to cut back completely on mass immigration and it would do minimal financial harm to anyone except greedy property investors, certain types of business and "new NZers" selling PR to anybody from their home country that can pay them for it.
Incidentally, I will go out on a limb and say that (unfortunately) the odds of Trump being reelected in 2024 are much lower than the bookmakers odds of 8 to 1, the reason being Biden is already making the mistake of allowing almost open border mass "net negative" immigration and once Americans see the destruction it causes to their country it may well gift Trump the next election. Haven't bet on it yet but I feel a big gamble coming on and I did bet and win (at 10 to 1) on his 2016 win after being told Trump was "unelectable". Meghan Markle and Kanye West are at 50 to 1. LOL
.
The banksters are printing gazillions each week. You think this just might cause inflation? Yep. And what tool do they use to fight inflation? Yep...interest rates.
Or will they just let inflation rip?
I would have thought inflation (other than housing inflation) would have shown already as the money supply has exploded in the last decade or two. Why will it show now when it hasn’t before?
Totally agree. At current rates, a 1% lift would represent a 44% increase in servicing costs. That would blow a number of people out of the water.
Clearly Westpac - as KiwiBank the other day - do not see the Government and RBNZ being able to immediately arrest current house price inflation.
This looks more like an attempt so they actually do something meaningful since they probably have growing concerns about the worsening serviceability of the mortgages that they are currently issuing, which will affect their business in a very negative way.
b21
You clearly still have not found out about banks' mortgage stress tests as discussed the other day.
Not knowing the facts and making such assumptions makes your assertion extremely questionable.
As someone who has worked on these models I do caution you about the assumptions being made. Like every model one needs to be cautious of these assumptions especially ones that rely on rational behaviour. Now if I stress test a household against a 7% scenario and they stay above water then that's great but my assumption relies on the income stream remaining stable and probably more importantly that the borrower is going to want to continue servicing the loan. If the repayments reach above a certain percentage of take home pay then it's not unreasonable to think that the household might opt to sell the property and move into a home that requires them to borrow less and make it more tolerable from a serviceability perspective. So it's not only at the point of default that borrowers choose to opt out. If a good portion of the banks portfolio all choose to sell at once because they're all feeling the pinch (because they've all leveraged up big) then you know what happens to the sale price. Think about the sort of circumstances that would exist in a 7% economy and it's not hard to see this playing out especially with the amount of investor interests (it's far easier to sell out of a house when you don't need it for shelter). This is just one of the assumptions right, what if income halved as one income contributor lost their job? Point being that interest rate increases don't have to reach stress test levels in order to induce stress test behaviour...human behaviour is a fickle thing.
Your blind faith in the banking system is adorable.
It's the opposite of blind faith, P8 knows his stuff and you'd well to listen to him. Currently banks stress test between 5.75% and 7.00%, yes there is quite a gap between banks
So let me ask you a question, since you do seem to know your own stuff too. Do you think that in the next 20-30 years is totally unlikely mortgages that have just been issued will stay under those percentages? Seems pretty unlikely looking at the historic data but hey, banks know what they do right?
I think nobody can predict mortgage rates 20 to 30 years ahead but I do know that neither the RB, nor the government, nor retail banks are interested in mass mortgage defaults, therefore it's very unlikely to happen. You're shifting the goal posts though, P8 was correct to say that banks stress test much higher than the current interest rates, thus giving a decent buffer for interest rate rises of 2-3 %
"It says that interest rates are expected to rise, with longer term mortgage rates expected to start rising first".
The banks are the guys that actually get to decide what your mortgage rate is.
Again: I would be noting this and start being prudent by considering long term rates when existing terms roll over (and the sooner the better), paying down debt (especially high interest debt), and looking carefully at significant discretionary spending.
With a 1% rise that $700,000 mortgage is going to cost close to $270 per fortnight. That is $7000 pa: pre tax that is around $10,000 which will tend to wipe out that expected pay increase or salary step.
This is not intended to be scaremongering - just highlighting that the days of falling mortgage rates and payments may be about to turn. From past experience having experienced significant mortgage rate increases one tends adapt and life goes on . . . and the sooner one thinks about adapting the better.
With the RBNZ lending banks credit at 0.25% and bear in mind very little total credit has been taken up are interest rates going to be heading north anytime soon? The RBNZ will just increase the FLP allowance won’t they?
Albert
While RBNZ is currently providing banks funding for lending at 0.25% it is my understanding that it is not tied to that rate but rather the OCR. (https://www.rbnz.govt.nz/markets-and-payments/domestic-markets/domestic… )
Quite possibly RBNZ will increase OCR to slow the housing market and my understanding of no promise to banks of increased funding or an extension beyond 3 years.
Each to their own to assess the future likelihood.
Just as an aside - why are banks tending to be slow to take up FLP? Too much other funding (at higher rates) that they are committed to.
Yes it's worth evaluating. But you also have to factor in that by fixing for a longer term now you would already be eating into that $10,000 pay rise before it happens.
refactornz
Agree entirely with your comment.
There is no certainty and there is risk in any economic decision along with advantages and disadvantages. One needs to come to their own decision and it is not until hindsight some will have called better and others not so well.
Me? Personally, I have always tended to listen to indicators and err on the prudent side.
Agree.
Having bought and benefited before the big Helengrad uplift in 2003-2005 my role at the time was made redundant for various budget reasons. 2008 hit and by then variable rates were 11%. I moved town, got a min wage job and sold the property 330k for a slight increase on original purchase price 300k. This kept me ahead of things, no debt, no stress, cash in the bank and then went traveling full time for a few years spending a bit of cash enjoying life. Eventually the bank called about 2011, saw all that cash and fell over themselves wanting to lend me money which I dutifully did from 2011 when no one else was buying.
Meanwhile the buyer of my former house had tenants who trashed the place, moved their gang mates in and had to spend thousands repairing it. They eventually sold for less than their purchase price.
So sometimes it's best to take a gain and sleep easy. Gotta know when to hold and when to fold then walk away.
Made way more from all the crappy deals I didn't do.
Agree.
Having bought and benefited before the big Helengrad uplift in 2003-2005 my role at the time was made redundant for various budget reasons. 2008 hit and by then variable rates were 11%. I moved town, got a min wage job and sold the property 330k for a slight increase on original purchase price 300k. This kept me ahead of things, no debt, no stress, cash in the bank and then went traveling full time for a few years spending a bit of cash enjoying life. Eventually the bank called about 2011, saw all that cash and fell over themselves wanting to lend me money which I dutifully did from 2011 when no one else was buying.
Meanwhile the buyer of my former house had tenants who trashed the place, moved their gang mates in and had to spend thousands repairing it. They eventually sold for less than their purchase price.
So sometimes it's best to take a gain and sleep easy. Gotta know when to hold and when to fold then walk away.
Made way more from all the crappy deals I didn't do.
Looking at trademe the number of houses on the market is starting to drift upwards as well- just on 21 800 properties nationally - highest its been since before Xmas. Indicates either more people are listing houses or the number of buyers is waning. Looking at recent open homes in Wellington- average houses are only attracting 10-20 people at open homes - nice well done properties though are still attracting big crowds. You do though get a sense that the market has lost the feverish pitch it had a few months ago.
Noticed the same thing in Christchurch. Some properties without anyone at the open home. Few have only 1 offer/serious buyer.
Well I can assure you in Auckland that is not the case. Even with the huge price increases in the last few months there are buyers scrapping it out at auction or multi offer where you have to be unconditional to have any chance.
Same in Hamilton. Auction prices are bonkers.
lordd.....yes, isn't it sad and awful that we have allowed our country to become such a dream-sapping, toxic environment for our young people whose hopes of home ownership rest on them placing their begging bowls at the feet of their parents.
Zollner's latest twitter:
"The housing market’s spectacular run has been fuelled in part by easy financing conditions, but these cannot continue in perpetuity. Housing market participants should be mindful of this fact."
https://twitter.com/sharon_zollner/status/1372003714433646592/photo/1
Warnings from the head of the RBNZ and the head economist of the bank with the biggest exposure to NZ property. If this does all come tumbling down, its not like we weren't warned and that it was a surprise.
What I love is the way some of these very vocal landlords on here think it's going to be as easy as putting the prices up higher and higher as interest rates increase..it doesn't work that way 'sunshine'.. as many long term landlords out there who do not need to raise rent as interest rates go up they bought years ago for a 3rd the price of what houses are worth now. They can be COMPETITIVE like any market. They will UNDERCUT the others. However delusional relative new landlords imagine they are in some sort of price fixing scenario.. With thousands of other landlords they don't know! Yeah right!!
Even if I can be competitive. It can not possibly be wise to ignore any upward price signal issued by the government. Even if only for the sake of the appearance of solidarity with other landlords or in silent protest of legislation that I dislike. (Raising rents whilst explaining clearly that it is a consequence of government policy is a good way to bias tenants political views)
A. Church would not agree.
Everyone getting in should be aware that large profits mean large volatility so they should be ready to loose big time.
What the party coming to an end? Quick open the border to keep the house price frenzy going.
NZers are causing the increases just fine without the borders being open....
Great comment but not too many thumbs up huh? Try blaming the foreigners next time, you'll get plenty of thumbs up, if not blame the asians specifically you'll make a lot of "friends"
As a property investor I commend the government for their handling of the housing crisis. Prime Minister Arderns' comments that property prices "can't keep skyrocketing" has been proven true, New Zealand housing has went to full warp drive since.
https://i.stuff.co.nz/business/124521587/what-happened-after-jacinda-ar…
Fully agreed, BAU for all NZ housing investors. The OZ banks, just showing pull & push promo maximizing the loan book then tag along Kiwibank (govt. support) - In the end? the only answer of housing affordability 'crisis' .. must be resolve from the 'pricing point of view itself'. Nothing to do with Supply and Demand, which both are subject to possible tweak/distortion. Plenty of distortion tools out there by RBNZ & govt, in order to maintain the pricing trajectory of Tulips, it's not yet ceiling.. and NZ is still behind Luxembourg.
Yeah after skyrocketing for a year by 30% to 50% she reaffirmed all speculators that she personally will not allow house price to fall ever as will do everything and anything as long as she is the PM (As if she was born to be PM to only support housing ponzi) and now expect to see price rise in single digit - 9%.
Definitely can see that not happy with 9% rise annualy when under the Queen with support from Mr Orr use to prise rise of 10% monthly.
She is a fantastic communicator, has good political nous and knows how to relate to people. But she has very weak understanding of cause and effect relationships in the economy. This is unsurprising given her background. But the reaction to her Government’s policy (or lack thereof) is entirely predictable to even the simplest of investors. The wealthy exploit this and probably why so many National voters went with her last election; financially, they’re better off with her than a National Government.
Excellent explanation of her strengths and weaknesses.
Exactly. Why vote for the party that makes policy that does not grab headlines but hurt in very real ways (like removing interest deductibility of residential dwellings) when the party capable of grabbing headlines, for doing what the masses think will help them but will actually help you build more wealth , is an option?
She also promised to clean up waterways. But, zilch. A big disappointment she is.
https://www.newshub.co.nz/home/money/2021/03/housing-crisis-share-of-ho…
Every hour news for FHB is indicating DOOM - Still the Great Jacinda Arden full with Emphaty and compassion - the image which is splashed all over the world by foreign media is IMMUNE to plight of FHB in her own backyard.
Is it because, she too knows that this is the last term for here and to now concentrate on UN job or similar.
Real Shame.
Empathy anf Compassion to the world
AND
Apathy and Compression towards FHB
The above sums up Jacinda Arden.
Under John Key FHB were not able to buy a home
BUT
Under Jacinda Arden FHB cannot even dream of buying a house.
Who is a bigger culprit?
I THINK WINNER IS JACINDA AS SHE HAS TAKEN AWAY EVEN THE HOPE/DREAM FROM FHB.
David Chaston and Greg Ninnes or may be Jenee T - we should have an hard hitting open article/letter (though will make no difference to thick skin) to the Queen Jacinda Arden on taking away even dream of many and she wants to be champion on Mental health.
Of course Ardern is worse. John Key is not a champion for the poor. And National never promised to fix a housing crisis, homelessness, child poverty, mental health, and everything else that Ardern did. All these areas (and more) are actually getting worse. At least she should do no harm! The question, then, is if someone is so ineffective why are they so popular? The biggest problem we have is a supplicant media, perhaps with the exception of Jenee here and Michael Morrah, who are unable to hold the Government to account because they don’t want to be excluded from the cool kids club. This Government is not cool. Whether you are right or left or liberal or conservative or whatever label you want to put on it, if you are remotely concerned about NZ then you know this Government is ineffective and we risk inter generational damage because of their inability to take effective action (whatever that might be). Do something!
John key did say this: https://www.youtube.com/watch?v=cWPgoAI1cLE but yes, Labour under Jacinda have been even more of a let down on this issue than the Key era which was bad enough.
She is so popular because the NZ population is overwhelmingly centrist, and is also wedded to personality politics.
Hence the popularity of Key and Ardern - both centrists, and both nice enough people.
Unfortunately centrism doesn't cut it in terms of the crisis's we face
Nothing lasts forever apart from house price increases in NZ
Hopefully in the next 12 months we can finally start to see some serious gains in the market. Sustained moderation jacinda said. But she didn't tell us moderation is 25%..
Anyone seeing changes in the rental market?
I only watch one suburb in Akl, but listings double what they normally are, moving slowly, and rents seem flat.
Very small pool size though, any insights on wider market?
Officebound
Here in Hawkes Bay a number of motels are still full of "homeless" due to shortage of rental accommodation.
I don't know how other areas are going but I am not hearing of increased house supply anywhere to address the supply shortage so would not be surprised if other regions are in a similar situation.
Possibly - note "possibly" - an increase in listing and flat rents could be that landlords are waiting and trying to attract only desirable tenants. That was stated numerous times by landlords as a consequence of the introduction of the new tenancy legislation.
been watching the lower hutt market- noting differences between listing price and price onthe rental just before its rented, approximately 1/3 are needing to reduce asking rent before successfully renting - average rent reduction has been about $44 week - this has climbed from around $20 at the beginning of the year to $50 in recent weeks with a number having to take over $100 off the listing price to get in rented.
I have noted a few who have had to discount have been recent purchasers of the property - so the rent expectations they were given at sale time haven't quite come to fruition.
Nope, went to an auction for a 3 bed terraced house couple of weeks ago, sold for $1,650,000, last Friday I went to another auction for a 3 bedroom terraced house around the corner. Sold for $1,795,000. Barely any different between the two properties.
Hope. The sedative of dreamers.
Posted elsewhere:
In the mid 80s Japan land prices jumped 51% in 5 years. 18 months after the overpriced stockmarket corrected, land prices did too, resulting in over 20 years of zero price inflation, broken finally by a 0.1% increase. Causes of the asset bubble included:
- a significant drop in interest rates
- distortionary tax settings
-strong tenant and lessee protections
-funding squeezes for banks as depositors shifted their savings to capital markets and land
-aggressive monetary easing by the Bank of Japan.
I'm seeing some correlations here
18 months after the stock market crashes is a very long time for you to exit your real estate holdings if really want to.
sadr... not as easy as that. As with stocks when the market starts dropping most people will avoid selling for less than they could have a few months earlier, It is the nature of greed and probably extremely prevalent amongst NZ property investors.
You've missed population decline.
The population decline began about 20 years after their bubble economy burst. They still had a growth rate of hundreds of thousands annually for quite a while after the bubble burst.
I just fixed a lot of debt for 5 years at 2.99%>
It took about 5 years for my TD choices to go from 5.25% to .85%...I suppose it can go the other way?
I think I'll be doing the same tbh when I'm off fixed later this year.
Well done you, is it with HSBC? helped partner recently to fix 5yrs at 2.89%, pass bright line by then (yip no CGT) only 5 yr loan on 200k. sweet.
That's how you did it babe, accumulate your 6 digits across the ditch, use the cash with good base projection site, then suck up those flight less birds. Their IQ/EQ kinda below Ave. so take the points while you can, our bank mates will help you for sure.
Brilliant move. With the current money printing rate, you can pay off 200k with two bitcoins in 5 years.
Prices TODAY are about 27% above the low points just after lock down in May, June last year where prices did drop 5% or so in most places...
It's a deceptive headline.
If prices from here stay static, the yoy figure can still increase as the prices during lock down dropped 12 months ago.
Will be interesting sale https://i.stuff.co.nz/life-style/homed/real-estate/124571445/the-origin…
All this language is to discourage Robertson from anything meaningful. Banks will always talk their book.
Fly, fly, make my house to 1.5m :)
27% price growth....yawn.
A conjectured 10% drop....help!! the world is coming to an end!! quick, slash interest rates, start printing money, drop LVR limits - throw in the kitchen sink!!
NZ public need to understand:
- C19, border closure it's not a 'Health' response rather it's a 'Border Security' response.
- 2013 RBNZ put a brake on investor with 40% LVR, so this is only tool to curb banks greed lending practices.
- So then 2020 QE/stimulus to 'C19/Health' response for the economy, is removal of LVR?/boom housing investors back with vengeance.
- Reluctantly Q1 2021, RBNZ following Banks put back the LVR, So amidst C19? govt & RBNZ main stabilising action is indeed what they labelled as 'NZ economy = housing matter', every subsidies end up in rent, thus mortgage commitment.. then.. yip the house of Banks.. every one of those Banks & Corporations? reported a 'modest' magical gain in 'profit'.. down but profit none the less - going Negative?.. dream on, it's free though.
Lets screw this.
Many people will walk away from their mortgages.
No they won't or you will be financially ruined in NZ for life. Default in NZ and declare bankruptcy you had better be prepared to move overseas and not come back.
"The system is not designed to function in an environment where house prices are going down".
Ah, what's the name of that kind of system? Ah,.... starts with "P". Rhymes with "Fonzi"..... anybody help???
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