Kiwibank economists say they are expecting to see "some healthy green shoots" emerging in the Spring housing sales season.
In Kiwibank's weekly First View publication, chief economist Jarrod Kerr and senior economist Mary Jo Vergara House say house prices are still falling, "but at a reduced rate".
"And sales activity is building upward momentum. There are signs of stabilisation."
They note that the REINZ data for the month of May showed further falls in house prices across the country.
"Wellington has seen the sharpest contraction in prices, falling 1.5% on the month to be down 25% from the November 2021 peak. Auckland is close behind, with house prices off 23% from the peak. The regions are playing some catch up, with broad-based declines deepening in May. The South Island continues to outperform the North. And that will continue," they say.
"The good news in the data, is the reduction in the pace of declines. And activity has picked up, in a sign of confidence returning to the market."
They say they expect buyers and sellers to go into hibernation over winter. "And the true litmus test for the housing market will be in spring. We expect to see an uplift in confidence and activity over the warmer months."
Kerr and Vergara say there are three drivers of the housing market.
"Firstly, the peak in interest rates should mark the bottom in the housing market correction. Falling mortgage rates will support confidence and activity.
"Secondly, the demand/supply imbalance will worsen. The surge in migration and the loss of dwellings at high risk in climate change will only exacerbate the housing shortage.
"And finally, the residential construction boom is coming to an end. The number of dwellings coming to market will fall back from very high levels. The growth in demand, with a migration boom, will once again outstrip supply in coming years.
"All three drivers point to a strengthening housing market, and price gains," Kerr and Vergara said.
In Westpac's Weekly Commentary, senior economist Michael Gordon says the key things the Westpac economists are watching in the economy looking ahead are:
- the state of the labour market,
- the degree to which the inflation rate slows over the course of this year, and
- the potential for a rebound in the housing market.
"The May REINZ figures showed that house sales have picked up from their lows and that prices have stabilised after a cumulative decline of around 17% since late 2021," Gordon said.
"The rise in house prices and a surge in rents in Australia, following a similar rebound in net migration [to that seen in NZ], may be a warning as to what could happen here," he said.
Gordon said the latest update from REINZ signalled that the downturn in New Zealand’s housing market has come to an end. While the level of sales remains low, they have risen in each of the past three months including a 2.5% increase in May (based on Westpac’s adjustment for normal seasonal patterns). Similarly, there have been modest house price gains in each of the past three months.
"But while the housing market has found a base, interest rates are set to remain at contractionary levels for some time yet. That’s likely to limit any material uplift in the housing market, at least in the near term."
GDP figures for the March quarter released last week saw NZ (just) entering a 'technical' recession, as defined by two quarters of contraction.
Gordon said the Westpac economists do expect the economy to continue to cool off, "as a growing number of borrowers face the bite of higher interest rates".
"That won’t necessarily result in an outright fall in GDP, as stronger migration-led population growth is likely to mask some of the decline. But it’s likely to be a long period of adjustment before we can be confident that the inflation pressures in the economy have been tamed – neither we nor the RBNZ [Reserve Bank] are forecasting inflation to be back within the 1-3% target range until the second half of next year.
"Any scope for OCR [Official Cash Rate] cuts looks to be some time away, and we still need to see tangible signs of a significant fall in non-tradables inflation in the quarters ahead."
The RBNZ has pushed interest rates up aggressively as it attempts to control inflation, with the OCR having risen from just 0.25% as at the start of October 2021 to 5.5% now.
Kiwibank's Kerr and Vergara said it's important to note that the full force of the RBNZ’s rapid rate rises is still working its way through the economy.
"The last rate rise, to 5.5%, was delivered in May. And rate hikes can take up to two years to work through the economy. We said it at the time, and we’ll say it again: the RBNZ should have paused at 5%.
"We think we’ll find that the RBNZ’s heavy hand did too much. It’s less about where we have been, and more about where we are going. And the outlook remains awkward, to put it politely," they said.
"We expect further contractions in economic activity into 2024.
"Demand is being weighted down by rising interest rates. If households spend less, which is what we are seeing, then the economy will contract. If businesses pull back on hiring and investment, which is what we’re hearing, then the economy will contract harder."
157 Comments
"Reduction in the pace of declines" ...means green shoots.
WTF.
Price declines can simply mean cheaper houses are selling less cheap.
What or how is the decline measure?
By sell prices v CV or v listed price?
I wouldn't trust the REINZ number cruncher spinners one ioata.
Eg 100% of houses sold above expectation!
You are a funny guy Zwifter - keep shining that ponzi t**d eh.
Heres some actual facts copied from a site I aren't allowed to link:
REINZ Monthly House Price Index Report For May 2023 (the HPI provides the best data to consider price movements.)
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Other than Manawatu-Whanganui, not a single region has an increase on a M-o-M or Y-o-Y basis.
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Auckland and Wellington continued its decline, with a 0.4% and 1.4% decrease respectively. Both regions are now a stunning 23.2% and 26% from peak.
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Auckland’s 5 year compounded annual return is a mere 2.6%, which runs significantly below inflation. It is also significantly below the 7.1% required on an annual compounded basis for the “property price doubles every 10 years” myth to come true. Either we are getting some seriously explosive growth in the next 5 years or the myth is remain just that for the last decade. Same for Wellington and New Zealand as a whole.
Come spring, the 2018 investors and holiday home owners will be rolling off their 5 year Brightline and finally freed up to sell. Most will have been holding on through rising interest rates and loss of interest deductibility just to get to the point where they can cash in their capital gains tax free. So I expect listings to start increasing soon.
Doesn't make much sense. If they wanted to sell they should've done so when it was clear things were over-valued and worn the tax bill (that's what we did, albeit with only one affected property). The additional gains back then would have more than offset brightline tax in the vast majority of situations versus selling at current prices.
You're assuming that it "was clear" that prices were over valued. And also assuming that it "was clear" the prices were going to drop. Not everyone is a clairvoyent like yourself. All people saw was that they had made gains and that if they sold they would have to give 39% of it to the Govt. So even if prices dropped, keeping 100% of what was left is still better than paying tax.
Yes once we have a normal yield curve again (and are on the other side of whatever type of recession is coming/happening) then we can start talking about greenshoots.
US 2/10 looked like it was going to head back to a positive spread earlier in May...but now it is heading back to being as deeply inverted as it was in March.
Deflationary recessions (and associated asset price destruction) have happened after the yield curve returns back to a normal positive spread. In the 1980's with stagflation, the recession came while the yields were still deeply inverted (deeper than we are now).
So I'm not sure if we're heading into a stagflationary recession or deflationary recession yet. But either way, there is a good chance that asset prices are going to get hit even further in either nominal or real terms in the next 12-24 months.
Could be peak reality - time will tell.
When enough reasonably intelligent and non-biased people (i.e. they don't own rentals or don't profit from RE industry) are in agreement on something then usually it pays to at least consider that they could be right.
If you go to the property investor forum on FB and the commenters there who struggle to form a sentence are telling you that house prices can't fall (because they own a rental) then you need to decide if this is really worth listening to or if it just noise from a vested interest. Same goes with bank forecasts, OneWoof, our media etc.
I agree strongly with your second para, I'm essentially a contrarian investor. But I've also missed opportunities by being unwaveringly bearish and failing to accept that markets function in ways that I don't agree with, or think are supported by fundamentals. I try to learn as I go and bias my thinking based on prior results, not what I think should have happened.
Why does this always need to be a 'you are right, I am wrong' situation? HW2 was exactly the same. In his desperation, he would say to me "either I am right and you are wrong. But if you are right, then I am bankrupt'. Its completely desperate.
Prices could stop falling soon, but they could also keep dropping from here.
I don't know what will happen. I don't work in certainties. I'd say there's a 50% chance prices stop falling/flatline soon. But equally I think there is a 50% chance prices keep falling. And somewhere in there is a very small chance that prices go up the next 6-12 months.
Above you assume you know that we've reached a floor in prices - this is bold...i.e. is this a 100% chance of be true? Or are you only 70% confident?
What say you?
No I don't assume anything. I work in weighted probabilities just like you do. I can be bearish, neutral, or bullish on any market. And really, I just enjoy a contest.
I only own the home I live in, so have no real vested interests either way. If prices do crash, I'll look to take advantage of that. I guess it's telling that I'm not currently looking to buy anything, despite my view that prices have probably bottomed.
As Taleb would say "don't tell me what you think, show me what is in your portfolio".
Deep down, if you really believed that prices had bottomed and we are at peak pessimism, you'd be buying next week.
But good for you on selling near the top - big call and must have been very stressful taking the risk you did (i.e. if you got it wrong, it could have been financially very painful).
Very true, although in general I'm not looking to invest in property and will only do so if valuations are truly compelling (I see how this statement feeds into your point, the delta being my take on the 'rationality' of the NZ property market, and the pervasiveness of skewing factors).
We only had one investment property, and I lost my job along with most of my industry peers, so offloading was more a relief than a stressor. I don't want to oversell my brilliance here ;) We got out a long time before the peak. But we did pay brightline tax, and the impetus to sell would only have got stronger as prices went up, which is really the point I was making.
Generally agree - although Taleb's turkey also very optimistic by nature.
The best idea is to know when to be optimistic and know when to be cautious.
As it stands, anyone who is cautious gets called a 'doom gloom merchant' so we live in a period where people appear to have lost their minds/ability to act rationally.
Yes but Taleb's Turkey could have pessimistically viewed that it was being fattened up for imminent slaughter and had many a worried sleep. And then had its head chopped off.
Or said Turkey could have been stoked with being fed like a champion and on a real happy buzz day after day. And then had its head chopped off.
End result was the same, but Pessimistic Taleb's Turkey had a miserable existence.
If you want a bit of pessimistic entertainment read the BS posted by goldbugs. They've never been right, and their predictions of societal collapse, a worthless USD, World War 3, an imploding property market, crashing stock markets, and of course US$50,000 + gold.
"Secondly, the demand/supply imbalance will worsen. The surge in migration and the loss of dwellings at high risk in climate change will only exacerbate the housing shortage."
"All three drivers point to a strengthening housing market, and price gains," Kerr and Vergara said.
If there is a housing shortage, can these economists please explain:
1) why are there 6,480 new properties still listed for sale and unsold? (that is about 20% of all properties listed for sale in NZ, and in Auckland that ratio is about 28%)
2) why are there reports that developers / builders have been unable sell their current inventory for sale?
3) why are developers unable to achieve minimum pre-sales levels in order to get financing from their lenders?
If there was a housing shortage, wouldn't these newly built properties be selling like "hot cakes" and there would be little to no inventory on hand to sell?
Why are property developers such as Du Val and Williams Corp not selling their off the plan projects and competed residential units like hot cakes? Why is property developer Williams Corp cutting staff?
Yup, those cashed up migrants are here to save the housing market and waiting on the sidelines for some reason.
These economists are predicting migration at record high, tight labour conditions to remain tight and rental prices to skyrocket very soon. Yet at the same time, they are convinced OCR has peaked.
I call dumb!
Yes, it is misinformation. That’s the whole point of price index.
If all houses in a street are valued at $1m, bar the corner section valued at $2m, then over one month that corner house sells for $1.5m, then has the street average value gone up 50% or down 25%?
Queenstown lakes is a great example as to why it’s important to be able to make this distinction as they have few sales, all over the place, which creates artificial volatility.
Some areas have Rakaia Timaru Waimate and Tapanui. All gone up like I said a couple of days ago there are areas that have gone up the last three months just not Auckland or Wellington. And I have brought in one of those areas just recently. 2nd most productive region in NZ Canturbury so much work here and not enough houses. Would seriously look at Ashburton/Geraldine
Is your argument that we are going to have greater than 3% inflation for the next 10 years? (and expect mortgage rates to come down over that time to justify house prices rising at 7% - i.e. what has happened the last 4 decades to allow the 'house prices double every 10 years' theory to happen)
If there isn't enough low priced homes that ordinary people and young couples can afford then we are stuffed. We need the up and coming as well as the mid class
I dont want Aoteatoa to be paradise for property millionaires. Jacinda will come back to tell us she could have fixed poverty.
"Who's paying me 250k /year to be able to afford it?"
Very entitled attitude there. In a 2 million dollar house, YOU and your flatmate(s) and/or partner are the ones paying.. the landlord.
The poor governance and decline of NZ has been obvious for decades. It's as if you've been in a coma for decades?
I suggest you find a way to become richer, get a statehouse OR a more suitable country.
So Yvil who's going to save your life from a burgler, or when you have an accident or when you go to emergency. Not to mention when your old and need some help. Society is made up of many people, I know this won't hit home with you, as you only see the world through your own lens. But we need people to drive buses, teach our children, take care of sick, pick up rubbish, arrest criminals, drive trucks and the list goes on. Unless you think a lot of these types of jobs can be done with vending machines.
"The good news in the data, is the reduction in the pace of declines. And activity has picked up, in a sign of confidence returning to the market."
Sums up what is wrong in this country. It should read
"The BAD news in the data, is the reduction in the pace of declines. And activity has picked up, in a sign of confidence returning to the market."
That's if we want to stop our best and brightest pouring out of NZ to leave behind a growing number encouraged to sit on the couch filing in welfare applications.
re .. "That's if we want to stop our best and brightest pouring out of NZ to leave behind a growing number encouraged to sit on the couch filing in welfare applications."
You are - of course - referring to all the oldies receiving their super, right?
It is them - as the facts show - that consume the bulk of the welfare budget.
(It's hilarious when people start bashing beneficiaries only to find out the bulk of them are over 65.)
But you're also going to take out more than you put in by way of health needs as well.
Older people consume far more of our resources than anyone else.
This is not necessarily a bad thing. But when it's at the expense of everyone else, it is.
Sitting on houses they bought years ago for fair prices, taking money for doing nothing, and filling up our hospitals every time they get a cold.
It's not just that super costs more than AS. Super costs almost 3x as much as ALL other benefits - including WFFTC - combined. And yet 1/3 of those recieving it are still working. (I don't know the percentage that outright own their home, but apparently that's also 1/3 of the general population, and I suspect heavily skewed towards retirees as well).
The views of the above-mentioned economists can be explained by:
It is difficult to get a man to understand something when his salary depends upon his not understanding it.
That sentiment is as applicable today as it was 18 months ago, when the first sign of what was about to happen emerged. We are nowhere near done with this Correction to the Property Market in New Zealand. And it's a correction we have to have.
I wish we had a law obliging everyone interviewed in an article to have their interest in the matter disclosed:
"Jarred Kerr, Kiwibank chief economist, whose interest is for house prices to rise to infinity, as 75% of his bank's value is directly tied to national house prices, said that he reckons he knows what the future holds: ..."
It will come as no surprise that Jarred Kerr, Kiwibank chief economist, is well and truly vested with multiple investment properties:
From OneWoof story Dec 22:
Q. What are you now – long, neutral, or short?
Long. I definitely have investment properties (including an apartment in Australia) and we own the home we live in in Auckland.
https://www.oneroof.co.nz/news/a-stain-on-our-country-kiwibank-economis…
Incredible, how bankers and economists who recently failed so dismally in understanding the correlation between decreasing interest rates and increasing house prices and otherwise had zero idea, suddenly have it all worked out. They do seem to be forgetting that the rate of change of interest rates isn't the same as the rate and they also seem to be ignoring affordability.
Yep. It's remarkable how these very smart people think 'interest rates are not rising anymore' is the same thing as 'interest rates falling' in terms of affordability; as if someone currently locked out of the market by a 6% rate will suddenly find it affordable in a few months if rates haven't gone up... Remarkably similar really to the whole 'turning the corner' narrative on inflation when prices are only rising by 6.5% instead of 7%, as if anything other than exponential inflation represents things getting cheaper.
It's sheer desperation to be on top of the narrative and pick the bottom/top before anyone else IMHO.
Since the last month almost every bank is screaming in the media that the bottom is in for the housing sector, even though there's just a slight increase in viewings. Seems like the banks are worried.
Almost everyone who borrowed during Covid is in negative territory now. It does not look good in the books of banks who are sitting on exorbitant profits since the last 2-3 years including bonuses never heard of.
Reality should sink in that cheap money is out. FOMO will only be done by Builders who already have their fingers burnt.
We traded up, settling in December 2021 arguably the peak. Today's bank valuation on our property is down 22%. We were fortunate to trade up with considerable equity, so we're still sitting on about 25% but feel for any FHB who bought with a <20% deposit.
Meanwhile Homes.co.nz has our property up 20% on original purchase price, if it's consistently this far out across the board then many people may be unaware how much their property is actually worth.
"Falling mortgage rates will support confidence and activity."
Does there seem to be a big co-ordinated effort by property promoters with vested financial self serving interests to instil confidence in the residential real estate market to persuade buyers to buy?
Or is this normal level of property promotion due to vested financial self serving interests?
Yep - OneRoof had an article just the other day with the headline "Experts on how much house prices will rise now they've hit the bottom".
It seems like overnight a large number of banks / commentators have now declared that we're at the bottom, despite the fact that prices are continuing to fall.
Today's articles in Oneroof.co.nz - seems like someone is trying to create fear of missing out.
1) "Why house price growth in New Zealand is imminent"
https://www.oneroof.co.nz/news/why-nz-expect-an-australia-like-revival-…
2) Tony Alexander: First home buyers waiting for further price falls likely to come unstuck
https://www.oneroof.co.nz/news/tony-alexander-first-home-buyers-waiting…
Remember to be aware of the self serving financial interest of the author. Caveat emptor.
It's all a concerted and colluded bs effort to breathe life into the RealEstate dead body.
It's DEAD and the decay is accellerating.
Telling people to Jump is now, while the pain and "Blood in the streets" is only tickling and trickling Is TOTALLY reprehensible!
IM CALLING FMA TO INVESTGATE THESE COLLUSION CLOWNS!!!
This Debt based problem is universal, and the very thing we need to avoid here is a similar catastrophe.
Britain is heading for a “mortgage catastrophe”.....thousands would be forced to sell their homes.....while the government would keep the issue under review, there were no plans for cash help for struggling homeowners.... Observers warn (that Official) interest rates could exceed 6 per cent by the end of the year.....“This is a mortgage catastrophe staring us in the face,”(SMH.Today)
Any opinion from sage economists here that sway those on the edge of financial stress are ill-advised. They are counter to what the RBNZ has been trying to get us prepared for. This (the current market) may be the last chance they have of escape with what's left of their shirts. Talk of 'green shoot's etc' is not helpful given what's looking like a worldwide issue that about to get resolved. (NB: And yes, for every seller there is a buyer. So let's hope the likes of Kiwibank, and the rest, do their due diligence and ensure that any party that buys property is well buffered against future price deterioration)
They note that the REINZ data for the month of May showed further falls in house prices across the country.
Actually they didn't, and that's not an opinion, it's just fact. According to the May REINZ report prices rose 0.5% in Auckland and were flat +/- 0% in all of NZ. So that's a very misleading statement!
I'm on about accuracy. Have you read the May REINZ report? I have and it states that prices have gone up in Auckland and remained steady in the whole of NZ.
It's on page 3 of the May REINZ report under "Snapshot - May 2023"
Median house price month on month: National $780'000 +/- 0.0% Auckland $995'000 + 0.5%
Which is explained by the HPI being adjusted to "compare like with like".
So yes - prices can go up - these are the nicely presented, recently renovated and staged properties that are move in ready. Meanwhile, the ordinary properties - that aren't selling anywhere as fast - continue to drop the HPI.
If you want a fast sale - you need to spend up big time to get it. i.e. what you get back in your hand is even less than the headline numbers suggest!
I don't buy the 3 factors that will lead to a recovery in house prices:
1) Interest rates may have peaked, but that's not a reason for house prices to recover. As long as borrowers have to renew their mortgages at higher rates, pressure will remain on house prices.
2) & 3) yes there is more immigration and less supply of new housing is yet to come, but this will mostly put pressure on rents, much less on house prices. Immigrants are overwhelmingly renters for the first few years of moving into a new country.
True, immigrants are mostly renters (at least for a while)
Also, I dare to say that what immigration actually do is wage deflation and prime inflation.
Need more food, more cars, more infra, more everything, but more peps in services too.
What would happen if ocr must stay high because of food inflation but salary go down because of immigration?
That won't be pink for the housing market
Kiwibank:
"We think we’ll find that the RBNZ’s heavy hand did too much… We expect further contractions in economic activity into 2024… Demand is being weighted down by rising interest rates. If households spend less, which is what we are seeing, then the economy will contract. If businesses pull back on hiring and investment, which is what we’re hearing, then the economy will contract harder."
Agreed, so how can they come to the conclusion that house prices have bottomed…?
"We expect further contractions in economic activity into 2024"
This isn't good for asset prices - it is very bad!
Asset prices contract when productivity falls - at least in a real economy that isn't being run by delusional fools.
Asset are priced based upon the present value of future discounted cash flows. And they are saying that cash flows are going to contract. This isn't good.
Yes, Yvil, I noticed that too.
On the one hand the RBNZ has overcooked things, which means we are likely going to tip into recession, households are going to continue to tighten their belts, as the overdone interest rate rises flow through over the next two years ...
but there are green shoots in the housing market and house prices are going to start increasing in 2-3 months' time??
Odd! (I'm being polite)
Exactly. There is so much contradictory and weird assumptions in that article that I can only surmise that they are desperately pushing the prices have bottomed agenda. That is the only logical conclusion I can come up with, and its quite disturbing on a number of fronts.
Makes me chuckle ... As a long time share investor I've watched the prices of individual stocks hit bottom and start recovering. It can happen quickly. Or very, very slowly.
But honestly - the housing market is a very slow moving beast when compared to shares. Very, very slow! I find it hilarious so much talk seems to think property prices are as dynamic as shares.
And, btw, even when a share starts it's recovery, you can wait years before others pile in and you've gains worth mentioning!
I think 2020 has messed with people's heads.
The assumption now is that as soon as interest rates start dropping, house prices will go up by 40% in the subsequent 12 months (as was the cast following the initial COVID lockdown).
Who knows, might happen and I'm left looking like a fool but it would be a disaster again from a national social and financial perspective if this were to occur.
Flat prices that get chewed away by inflation/wages is going to be a much better outcome and bring about better stability (financial/social).
Yeah Nah. A few people are going to be in the shit when their incredibly low interest rate mortgage rolls over in the next 12 months that bought a house within the last 2 years but the vast majority are going to carry on as normal. Fully expecting to see a short term uptick in mortgagee sales but then it will drop sharply. Unless something else happens in the economy that is currently not even on the the radar then its BAU in 12 months time. ACT/National government from October and then Summer so the positivity will be on the rise.
Headline in today's nytimes.
Where Housing Prices Have Crashed and Billions in Wealth Have Vanished. In New Zealand, high interest rates have sent property prices sliding nearly 18 percent since November 2021.
https://www.nytimes.com/2023/06/19/business/new-zealand-housing-prices…
I am the contrarian. When all around me said in 2021 - "you cannot lose on property" "borrow as much as you can get your hands on and buy buy buy" "house prices never fall' yardeyahyah.....
Then I knew, not to be one of Talebs Turkeys - and NOT believing like the the majority of Kiwis, betting the farm on property or planning too and enslaving your next 30 or 40 years to eyewatering repayments and Bank slavery.
I've owned lots of properties, probably about 15, and I'm not poor, and as for believing Taleb or any other 'expert', you might want to check out how 'poor' Frank Lowy is after buying all those Aussie shopping centres. Do ya think Frank never borrowed any money? He borrowed billions.
I borrowed heaps when I was younger, even betting my own house on the stock exchange, cashing out before the 1987 crash. There's nothing wrong with borrowing money, you've just got to borrow it for the right assets, not cars and travel etc.
Taleb...LOL....selling books to suckers. Listen to all the Chicken Littles here..in a few years time they'll be looking back asking themselves how they got it so badly wrong.
Goldbugs love 'experts' they throw money at them left right and centre, but the 'experts' are rich selling books, advice and seminars, while the goldbugs are poor.
The AK Council have knocked back plans changes recently in Riverhead, sure your fully aware?
So with Engineer Mayor Brown, calling out past bad developments near waterways and flat round flood Plains.......this would make many owners of or near adjacent properties undevelopable?
Thoughts?
I'm well aware, but there's still plenty of other development, like the massive retirement village, road widening, the Westgate development, SH16 improvement etc.
Only a small area of it was prone to flooding, wouldn't mind betting the Fletchers plan will be amended and off it goes. A few years ago some bright spark in Council had the idea that Auckland was going to be ring fenced and no dvelopement would take place outside this boundary. In the case of West Auckland it was Whenuapai. What happened to that?
We agree on borrowing to buy intrinsically undervalued assets, that will produce repeated earnings over and above borrowing costs.
These are very hard to find - but the time will come.
We all need to be mindful to not be too deeply into one industry - that a disrupter or the Govt/legislation can then tip over our entire financials.
- this is exactly where the entire NZ economy is tied and held hostage to, our economy IS the housing industry.
So seeing the so called "economists haha" and Bankers, suddenly in Unison - blow the horn from every hill "But property now" as they have over the last few weeks....... THEY MUST BE COMPLETLY CREEAPPING THEMSELVES.
This appears to be a very desperate appeal, to save themselves.
It reeks of complete and utter desperation. RUN!
"When its this bad, they have to Lie"
What was kiwibank thinking appointing as senior economist a 26 year old Mary Jo Vergara.
Dont take this personally girl, but years of study and no life experience is simply wrong to be going around and lecturing the country.
Sure you speak well, so does Sham Yaqub who found he had to walk back and eat his house non buying words. Clever dick Yaqub tried to out-do Twyford by announcing 500,000 homes. Phil Twyford blushed at that.
If boomers are retiring, are they going to liquidate or keep trading houses with each other? For the longer timeframe I don't foresee real estate investing activity to increase. Zoomers are more enamored with AI/social media/equities rather than old school unproductive assets. Many more different ways to make a buck in this new world.
You guys remind me of goldbugs.
They're always whining about how bad it all is, interest rates are high, interest rates are negative, a housing crash is on the horizon, stock markets are about to plunge to near zero, WW3 is near, the USD's going be extinct soon, US debt will crash the world economy, etc. etc.
I've met plenty of rich real estate investors, but I've never met a rich goldbug. Everybody needs somewhere to live, there's no way around it.
I've met a poor Real Estate Investor. One who was a Chartered Surveyor in the UK; RE Agent in other words. He'd lost everything - and more, as the equity in his holding; accumulated over many years, evaporated to less than zero. He was probably 55 years of age; standing on The Pavement in Clapham Common, weeping, and wondering what he could do to salvage his career and finances.
Paper 'wealth' can disappear quickly if the unexpected happens. And let's face it - no one expects property wealth to disappear in New Zealand, do they?
It hasn't in my lifetime, and I'm not young. Yes there's been some very unpleasant setbacks, but it depends on lots of factors, in particular how much money you're borrowing. That can be a killer.
You're not gonna get rich without taking risks. Right?
I have mentioned this once before but I'll post it again. Many years ago I went out on a limb and bought a few sections in what's now West Harbour. There was nothing there at the time.A guy wandered up to me when I was building my house and said "nothing will ever happen out here".I still have a house there that cost me $140k total.
Gold's a terrible bet, OK if you get in and out, but long term about as bad as it gets. Inflation-adjusted, gold is still thousands of dollars less than it was in 1980.
And no dividend or rent. Goldbugs don't like to adjust for inflation, because it makes gold look like a very bad bet, which it is.
Buy property when interest rates are high, because the amount you'll save on the house price will generally way exceed the amount you'll pay in additional interest.
Of course that very simplistic, there's lots of other factors in play, like the area, the quality of the house, noise, prone to flooding, traffic, bad neighbours, future development, etc.etc.
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