Olly Newland recounts the ways to avoid LVR restrictions, and forecasts that stagnant rents are about to rise soon

Olly Newland recounts the ways to avoid LVR restrictions, and forecasts that stagnant rents are about to rise soon

By Olly Newland

Stories about the the property market dominate the headlines more and more as house prices increase especially in Auckland and Christchurch.

Hardly a day goes by without another horror story about some huge price being paid for some house that should be worth only half what was paid.

Of course, this has happened many times before … but on this occasion, the boom is based on REALITY and not some speculative fever.

Back in the mid-1980s, for instance, there was a massive share market boom. There was no rational reason for the huge up-swing in share prices. There were millions of shares for all to buy — but the ‘fever’ had set in and couldn’t be turned back.

Likewise, the property boom that coincided with it was based on nothing more than money coming off the table from the share market that its owners wanted/had to put somewhere else.

This time it’s different

There is a housing shortage in Auckland - and in Christchurch  - and there is no way that the shortage can be corrected in a short space of time.

Not weeks, months or even years.

A shortage of any product, whether property or pineapples, houses or hair spray, will always result in a price rise …  until the balance of supply and demand is evened out.

The Reserve Bank of New Zealand. What? Regulating the property market now?

Controlling Loan to Value Ratios (LVR’s)

The Reserve Bank is widely tipped (signalled, really, as is the way with these things) to bring in restrictions on residential mortgage lending — targeting borrowers with small deposits/down-payments seeking to a high proportion of borrowings.

As to be expected, there are howls from all sides saying that such restrictions would hurt the first home buyer; are essentially ‘unfair’; or will send vulnerable borrowers into the clutches of ‘loan sharks’ and other unsecured lenders taking advantage of the situation.

I take the opposite point of view. Anyone who lends money to someone who wishes to buy a home (even if the interest rate is high) should be applauded … because in my view, home ownership is vital to create a stable society. The ends justify the means.

The proposed measures may sound practical and targeted, but I am convinced that if actually implemented, they won’t make a blind bit of difference. In fact, they will play into other sectors of the property market … to their great advantage.

Recycling old ideas

There is nothing new about these sorts of restrictions. We had them all through the 1960s, 1970s and 1980s.

The property market then was just as buoyant (in patches) as it is today. Maybe more so.

All sorts of creative ideas where dreamt up to get around the ‘regulations’. It’s clear to me and others that if the proposed LVR limits are imposed, these old tricks (and some new ones, no doubt) will be dusted off and come back with a vengeance.

In those ‘bygone days’ the maximum that could be lent by way of mortgage was two-thirds (66% – the horror!) of the purchase price, or valuation, whichever was the lower. (Some things never change.)

The deposit required, one-third (33.33%, and yes, it was that precise) was impossible to find by many purchasers. So all sorts of mechanisms were used to fill the gap.

These included:

1. Getting the vendor to leave back a second mortgage – a  very common practice, then, which didn’t really matter because when the vendor went off to buy another house they got a second mortgage from their vendor and so on ad infinitum. This practice was cheap, as the interest rate was usually very low. Interest-free vendor financed second mortgages were common practice. Using them avoided any tax on interest received. The use of this stratagem actually increased house prices, as the forgone interest was often folded into the end price of the house bought and sold this way.

2. Mum and Dad would often stump up with the difference if they had it. But if they didn’t have it, it was common for them to raise a mortgage on their own home and advance the money that way. Of course, it wasn’t always Mum and Dad, but an Aunt/Uncle or Great Aunt (hence all the jokes) or family friends etc who would lend whatever was required. Sometimes in return they would get a slice of the eventual sale price when the time came.

3. The use of credit cards came to the fore. Then, as now, banks freely gave away credit cards with unsecured amounts that could be drawn upon. It was not unusual at all for a frustrated home buyer or investor  to gather together five or six credit cards each with a limit of (say) $10,000 … and Hey Presto! they had another $50,000 or $60,000 dollars that could be used as a deposit filler.

4. Personal loans and small second, third, or fourth-mortgages from small lenders (‘loan sharks’ some of them, to be sure) were then, as now, freely available secured against furniture, cars or what-have-you. These were very useful, even at horrendous interest rates. Property is a numbers game. The high interest rates charged were regarded as nuisance-value only as actually buying a home was regarded by far and way, the most important factor. The headlines will make a great song and dance about it, but that’s what happens when markets are interfered with.

5. Solicitors nominee companies (and 2nd tier finance companies) sprang out of the need for ‘top-up’ loans. Business meets market needs. They did an excellent job of providing extra finance without the nonsense of the ‘two-thirds of valuation’ limitations. Many solicitors nominee companies and finance companies did a first rate job in lending. Sadly, a number of the finance companies over-extended themselves (even scrupulously honest ones) in recent times - with the disastrous results which we all know about.

As Warren Buffett said:
“It’s not until the tide goes out that you find out who’s been swimming naked.”

There are still solicitors nominee lenders around today - so if you, or someone you know, is short of deposit, and if the Reserve Bank gets off the fence and actually imposes LVR limits, a few phone calls to the right people will hopefully soon sort the problem out.

6. Some very dodgy deals were also done to fill the gap, all of them highly illegal, but when there is an unfilled demand they are surely to be expected. For example, inflating a property’s sale price to get a bigger mortgage was one of them. When it was settled, the vendor would funnel overpaid cash back to the purchaser. It was particularly common to inflate the ‘value’ of commercial property by ‘hydraulicking’ rental returns and hence increasing paper values for lending purposes. (Don’t try this at home folks, just be aware of it.)

7. Buying a house together with a friend or family member got around the problem very neatly most of the time. A private arrangement would be entered into regarding who would buy the other out and when, or who would live where etc. The goal: own a property.

8. The low deposit house dealer was popular in segments of the market until recent times. Many of these dealers did an honourable job putting people into homes who otherwise couldn’t afford to buy. It was usually done by way of long a ‘Long Term Agreement for Sale and Purchase’ which was, in effect, an extended settlement with prior access (kind of like Hire Purchase) … and at least part of the ‘rent’ paid down the deposit. (Other names given to this sort of deals include ‘Wraps’ or ‘Rent-to-Buy’). Generous bank lending has largely removed the need for this type of dealer, but it looks like their ilk will be back in the market sooner rather than later.

9. Other top-up loans were often extended by employers, unions, charitable organisations, churches, lodges, clubs, and cooperative societies. Consider how you could make use of these in your situation if money is short.

10. Often a shortfall can be extracted from a bank using a guarantee from a family member or friend with assets, without the need for them to actually raise a loan. This is a painless form of assistance, the only catch being the need for the guarantor to stump up if a problem arises. (It does happen, so be cautious if you’re asked to act as a guarantor in such an arrangement.) While the property market is buoyant, problems rarely arise since a property can be sold fairly quickly if needs be.

Residential Rents: a Forecast

Rents have been largely stagnant for some years. This is due to several factors

(a) People emigrating to Australia, or elsewhere, leaving empty flats or houses behind.
(b) The huge number of dog-box multi-storey apartment blocks that were built which flooded the market.
(c) The large number of ‘wannabe’ investors who have been concentrating on the cheap rental end of the market and, as a consequence, have over-supplied that cheap rental market to a large extent.

Let me tell you, this is all going to change shortly. Here’s why:

• Emigration out-flow has turned to immigration in-flow. People who left NZ for better jobs and prospects are starting to come back, some of them with a decent bank balance behind them. Slowly but surely, they will put more pressure on the housing market, buying what would have been rentals, or competing with the locals for existing rentals. (See: New Zealand records biggest monthly net migration gain in four years; house prices could come under more pressure – Interest.co.nz)

• Any change to lending policies (e.g. limiting LVRs) will see a large number of people forced to rent longer. Currently, many renters can scrape together deposit and get into a home of their home. If this door closes they will cling to their rentals for longer. Rents must rise as a consequence as renters resist giving up their home - even if it’s a rented one

Indeed renting for life maybe the last resort for many as is common overseas. It has its advantages but as you don’t even own the letterbox creating a nest egg for the future is going to be neigh on impossible for most.

Furthermore higher LVR’s will push up rents by restricting the supply of rentals as investors who do a mighty job supplying houses will likely be affected as well. Few investors = fewer rentals = higher rents.

• As virtually no more dog-box apartments are being built, the supply is slowly drying up. They are being rented out long term or sold to genuine home owners as their first step onto the property ladder. As the supply of these dry up there’s only way for rents to go: Up!

•  The huge increases in insurance, council rates, and the cost of much higher building standards since the Christchurch earthquake will flow through to rents. It has to. (It does make you wonder what has happened to all the premiums that have been paid for decades without claims, and why the need for the increases but there you are.)

The coming increases have been well flagged already and are coming true as many business and home owners are finding out to their discomfort. (See: Insurance premiums may double next year – Stuff.co.nz)

• Coupled with immigrants and ex-pats coming back home is the steady pressure from Christchurch residents and the surrounding areas, some of whom for all their admirable courage and resilience, are looking to Auckland to move to if given half a chance. (The current shakes in Wellington are not helping either!).

How much for a home overseas?

In my regular trips to Australia, the USA and Europe, I have taken a keen interest in comparing house prices here and in other countries.

The stories you hear about collapsing house prices and giveaway bargains for a handful of of dollars are true enough, but with one exception: They are almost always sited in newly created suburbs in the back of nowhere, or by lakes that only mosquitoes frequent, or along shore-lines swept by hurricane winds a million miles from anywhere.

Go to the main cities and you will be surprised.

In London NZ$1 million will buy you a small apartment. A car park is extra and there is likely no lift. For example and this Or the other extreme.

Likewise in Paris and New York. (By the way, as well as paying extra for lifts and car parks, you are lucky if you get a real kitchen.)

Take a look at this or this or this.

The foregoing are simply a taste.

I suggest that you search the internet yourselves and compare. I am sure you will be surprised how expensive property still is in most of the main centres of the world. There appears to be little or no ‘recession’ anywhere in these centres … as can be seen in these prices. My own ‘on the ground’ research backs that up.

In my recent travels through Europe, the UK and the USA, I marvelled at the fact that the streets were full, and shops and restaurants were packed to the rafters everywhere I went. This is not how it has been portrayed in the media, so what gives?

If there is  a recession in Europe, the UK or the USA, then it must be well-hidden in the countryside because I saw little of it in the cities.

Yes, I know Auckland and Christchurch aren’t these big cities, but the message is clear: New Zealand house prices are NOT overpriced at all. If anything, they are too cheap (!) and all we are going through is an adjustment - one that had to come - and nothing more.

It will take a while to taper off as such adjustments always do, but the ‘slump’ that is predicted by some, is nowhere on the horizon.

Certainly, it will never be felt in the main centres.

So my friends, you can buy in confidence in the certain knowledge that values in the main centres are rock solid.

A word of caution

It does not pay to be over-confident and act recklessly with your money. ALWAYS do a proper due diligence, get truly independent advice, and don’t think you are infallible.

Mid-winter, especially the month of July, is one of the worst times to be taking risks. (The other bad months for it are: January, February, March, April, May, June, August, September, October, November and December.)

Over the last fifty years the most frequent frequent question I’ve been asked is: “When is it a good time to buy”?

My answer has always been the same: “Last year”


Olly Newland
© July 2013 www.ollynewland.co.nz  Used with permission.

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The Oracle has spoken and the narrative is as solid as a Commodore. 

Olly is always worth listening too.  But always predictions on exchange rates, interest rates, and house prices, are a shot in the dark.  Many of the dramatic past trends have emerged as a complete surprise.
Rents have been stagnant in relation to house prices, which to my mind illustrates that there has not been a supply shortage, and house price rises are not a supply issue.
There is something in these indicators that does not add up.  And also the situation varies dramatically, even within Auckland.
Olly thinks rents are about to rise, because demand will rise - inward immigration etc.  Maybe he is right.  He is a clever man.  And a stopped clock is right twice a day.   No disrespect to Olly.
For me, the jury is still out.

I think that you're simply trying to replicate the Oracle's thunder. 

LOVING your articles today Interest.co.nz
It's great to hear someone tell it like it is rather than just blindly predicting doom and gloom. 
"but the message is clear: New Zealand house prices are NOT overpriced at all. If anything, they are too cheap (!) and all we are going through is an adjustment - one that had to come - and nothing more."

How can it not be doom and gloom that New Zealand is having to load up on more debt to buy the same old houses off each other? What's good about that for the country?

I'm saying it's good that someone is telling it as it is, when I said "people are blindly predicting doom and gloom" the key word is blindly.  They are basically saying "don't do anything about the problem, prices will crash soon", which is just not correct. 
To survive and prosper in this world you need to be well informed, I feel sorry for the people who take the advise of some journos/commentators on this site (and elsewhere) who keep saying "don't buy, there will be a correction soon and you'll pay half the price in a years time" and in a years time they are priced out of the market.  I saw it all through the naughties, now I'm seeing it again, it's bad advice, plain and simple. 

Of course he is not predicting doom and gloom when he sees everything trending in his favour.
Does Olly ever predict doom and gloom.... that depend on which side of the fence he is on - eg. he certainly did in 1987 when he was on record as saying "the party's over and was an unhappy chappie for some years thereafter.

its good for the landlords. But generally bad for the economy. If rents rise sharply as Ollie is predicting then there will be even less disposable income to spend in the economy. Add to it the ridiculously high and rising cost of petrol and power. The same goes for young home buyers loading up on debt. There will be more job losses or at best bugger all job growth as consumer spending stays suppressed because of these living cost pressures, and with more net migration unemployment will rise, creating a big fiscal drag. 
It's plain to see for anyone with half a brain, and could have been addressed whilst housing was in a slumber through 2008 -2010. Unfortunately we had a housing minister (Heatley) who was totally inept, and leaders higher up the chain who couldn't see the window of opportunity.  
time will tell if it gets as bad as I expect. I'm still standing by my start of year prediction of unemployment of 7% plus by end of 2013 

One small caveat Olly. Any émigré who fled Auckland to Australia in search of el-dorado, who sold up, taking their swag with them, and having failed to find the holy grail, now seeking to return will find they are caught in a deadly embrace at the gates of Valhalla
The AUD/NZD has gone 20% against them
The price of property has gone 20% against them
A net loss of 40% in the space of a few years.
If, when they left there were 5 houses for sale for every square kilometre they now find there are only 2 for sale per square kilometre. Many houses have been taken off the monopoly board. Unlikely they will be buyers, they will be tomorrow's renters, with little choice.

Good points however if they really want to come back they still come, wishing waiting and willing the forex rate to come back into their favour..usually it doesn't in their timeline and they get on with it. A good number recently coming back to Christchurch...they need work...

Icono, you forget to mention (or choose to leave out):
they've been earning 6 figure salaries for years now;
The properties they owned in Aus have gone up; &
and you get more house for your buck here than in Sydney, Melbourne, etc. 
Your one of the regular commentators on this site that seem blind to what's happening right in front of you. 

A minor detail:
In London you can get a three bedroom terreaced house (not an little apartment) with garden for £500k / $1M NZD in an up and coming area. Sure, you can pay way more for way less and live in Kensington. 
In London you can commute to a choice of 1,000 careers with amazing companies. I'm not dissing anything about Auckland (fab place to live) but London is the engine of an economy, with never-to-be-built-again integrated transport that supports 8 million people. It also absorbs billions of property-seeking cash from Russian, Middle East etc all of whch kept London steady through the last few years. 
London restaurants are busy if you stay in the tourist spots but I go back every few months and I'm struck by the empty shops on Oxford St and Tottenham Ct Rd. There is no big spending. Everyone is being careful. Things are tight. Head further north and it's worse. Head to Barcelona or Dublin and it's tragic.
Auckland is not London. I can't see the engine of an economy. I can however see the effects of foreign property seeking cash and of low interest rates. Property is more affordable as a result but it is not a permanent state. For example, crank up interest rates by 5% - guaranteed slump! 
Finally rents won't rise as long as 'wannabees' investors continue to pile in. As far as I can see they are piling into the nicer family suburbs as well. There is no shortage of supply for renting and the more property investment is encouraged (especially as a guaranteed no-lose deal), the more rents will fall, not rise!
No army of cashed up returning miners from Oz will change this! And iconoclast is right - the tide has turned against them so basically they are not going to come back! In tough times, Oz is a better bet surely?
Who knows how it will end but if it looks like a bubble, and feels like a bubble and sounds like a bubble (those property investment ads on radio!) then maybe it is a bubble? It doesn't mean it will implode, but it is a bubble by any definition!

I know London well and it is a large area. Agree with your comments except I don't see much worth a second look at 500K.

South-East, on the new overground route would be one - Nunhead etc. 10 mins to London Bridge. But having checked it looks like prices are rising again after the first time buyer stimulus so some 3 beds are breaking through 500k. But it is in the wrong part of London, or the right part if you believe "the new shoreditch" labels...

Macbet, your not comparing apples with apples.  $1m (500,000 GBP) in Auckland buys you a 5 - 6 bed, detached house in a good area.  To get a 5 - 6 bed, detached house in a good area of London is almost not possible for any amount of money as most are terraces with little - no back yard. 
You have to compare sqm to sqm and not just the house but the land also, then you'll start to understand how cheap Auckland is. 

You are right but then you have to take into account salary/earnings and it swings back again! The salaries don't support the same levels.
It makes me think that the localised nature of the bubble is driven by those who are immune to salary constraints - property speculators with enough equity to maintain a very easy line of credit, foreign investors, wealthier immigrants. And between them they are a big enough group to swing a constrained market upwards in the areas that interest them - central Auckland and nicer suburbs.
I do think in Auckland it's a hot market built on expected gains, not on any fundamentals. The rest of the country are going about their business, buying and selling houses without much fanfare or front-page headlines. 
The first sign of a wobble or a jump in interest rates and the late-to-market "wannabee" property investors won't have the nerve or cashflow to ride out any bumps in the road...or keep up the secondary payments that Olly is suggesting as the answer to restrictions. At that point it's a race to the exits. But it will take a shock to disrupt confidence in things as they stand. Check back in three months I think...

Anyone else just read 10 different ways to get yourself in far too much debt? 
Don't have the deposit - find a way to get a 2nd mortgage/loan and pretend it doesn't exist so the property spruikers can still sell for loads of cash. Anything but prices drop to 'affordable' levels.

Actually Olly just gave us 10 reasons why property has been in a multi decade bubble. Those are 10 reasons why a lower price would have been paid if desperate measures hadn't been taken to borrow the deposit. Sure there have been peaks and troughs within the bubble but the simple act of borrowing is forcing prices higher than the underlying fundamentals can support. It is a credit induced bubble.

... so it's all to do with cheap munny , easy borrowing , XS credit  you reckon ...
Nothing to do with an actual shortage of houses then ? .... the other side of the supply/demand equilibrium .....

Absolutely. When you look at density the supply issue is nonsense. Ask yourself this, if 10% of Aucklanders sold up had the parent/grandparent living with them what would the supply look like then. People have been buying houses simply because they could, if they can't they won't. Quite simple really.

People buy houses cause of all the hard earned rent 'ya can earn too scarfie. 

Bubbles happen because of a lack of cognisance and intelligence for the larger picture. Property investors are at the thick end of that wedge with total self centredness and no appreciation of the wider effects. It is a zero sum game so there are always wider effects. Yep peoples greed makes them do all sorts of untoward things. The theif is an opportunist that takes something because it gives him an advantage and he doesn't have to put any effort in for the reward. Does he think about the victim? No. A property investor is no different it is just the time scales are longer. But for every action there is an equal and opposite reaction.

Holier than thou claptrap Scarfie.  How about you tell us of all your own decisions that were made, about where you live, and how you get income, that were made primarily for the greater good.  Might be a short list.

It is actually simple math KH. Interest will always cause a redistribution of wealth.  I had that debate with Don Brash and won but I don't necessarily expect the average property investor to grasp the concepts I speak about. As for what I have done, irrelevant because I have spent the greater porting of my life being deluded like the majoriy(YL even seems to think he is doing gods work. Lol), no one ever told me so I had to work it out for myself. You have no excuse though KH, you have now been told.  Seems you prefer the head in the sand approach, no problem though because I have come to expect that.
Property is just an expression of the interest redistribution, landlording actually goes to an extra level. Only difference is that theft is overtly taking another mans property, interest and being a rentier have the same outcome but are just covert.

HaHa.  Your view of yourself is still saintly scarfie.  No list !  So apparently you don't live what you preach.    Oh.  And thank you for explaining that nobody gets your point, because you are so intelligent.

Consider yourself 'told off' by scarfie KH :)

'Comon now scarfie. There's lots of property investors and they do a good job providing shelter for people. Why look, renting prices are cheaper than buying a house, so it said on interest.co.nz the other day.
Shows just how damn efficient PIs are at providing housing for people in New Zealand.
And for that you should salute PIs, not cast derision in their direction.
I know lots of PIs and they all earn their rental income, that's for sure.
PS It's only a zero sum game in the sense that the loot winds up in my bank account and never leaves. On the most sober of reflection about this issue I think that there is really no more suitable place for the money to stay than in my bank account.

I concur totally with Olly's views about property rents. They are now way behind the long-term average increases that normally happen in the market.
Sharp adjustments are in the offing. I predict that things will get nasty for all the "happy renters."
All's well in Landlord land.

YL. Not everything rises on some sort of formula.  Are you sayin that you have not been raising rents as you find you can.  My guess is that your rents already are what you find you reasonably get.
When I did the landlord thing I got the best price I could.  Tempered a little because when I overdid it, I found that the tenants soon decided they would be better elsewhere.  But I certainly never under rented them.  Nor do I think many do.
But you may be right.  Try pushing every rent you collect up 20 % and see how you go.  And 20% every year thereafter.  The result will be illuminating.  We would like to hear.

I wouldn't think of doing that KH.
The market will move first. I will only follow it. All property investors are 'price takers'. I certainly can't 'set' a new rental price in the market.

The rental property market will never move upward - the average NZer is worse off than their American compatriots - just plain dirt poor - and will remain so for as far as one can look into the future.

The rental property market will never move upward
I'm not so sure about that Stephen...  sadly there is not direct , immutable ,relationship between the average wage and Rents.

YL.  So maybe your thought about that rents are 'way behind' is more hopeful than real.  Yes - property are price takers.  The rents now received might just be exactly correct.

Oh I agree with you KH. The rents now received are exactly correct.
But I don't think rents will stay as they are.
As bank interest accounts yield more, so will properties.

What Olly has forgotten about house prices in other countries is this:
In other countries interest rates are SUBSTANTIALLY lower than in the land of the long white leaky house.
A loan of $1M is can be quite affordable at 1.5%, but not at NZ's 5%+
Solution?  Leave Auckland.

Solution? More like buy in Auckland and reap the coming rewards.

good point. My sister in law's family who live in central Nagoya (Japan) built a new 2.5 bed detached arhcitecturally designed townhouse a couple of years ago. The location would be equivalent to Parnell. The house and land costed about 750K, and they are paying about 1% interest. You'd pay about the same price in Parnell, at what 5-6% interest?

I think rents will rise steadily, but I doubt sharply. Many of the young kiwis who would have come to Aus will stay with family / friends in Auckland rather than rent.
I think Ollie's comparisons of Auckland with big global cities are ridiculous. Not comparing apples with apples at all! 
A far better comparison is with mid sized Aus cities like Brisbane, Perth and Adelaide. A comparison with these cities will show that Aukland prices are getting out of whack. Over here in Aus my colleagues are wondering what the heck is happening in Auckland. I just tell them it's another speculative frenzy resulting from pathetic inaction from the govt with regard to both supply and demand side measures.
Getting back to my points from yesterday, rising rents will be another factor that erodes consumer spending and limits the kind of boost to consumer spending that (bank) economists are predicting.

Not so sure on rents, unless ppls wages are increasing there isnt the money to pay rent.
Case in point or proof would be churn, ie are renters moving more frequently each year as landlords try and raise rent then taht would suggest rents are near a ceiling, which I suspect they are.
You are right on what will happen with consumer spending...no more money means something gets bought less or its price has to drop. I think we can see this is terrible whiteware and tv sales, unless thay have long interest free periods.

Clearly Olly is simply talking his book here. His solutions to the coming lending crunch are all about how to bypass the safety features and still borrow. The best solution will be not to borrow at all. The coming spike in interest rates will rapidly deflate the hubris of Auckland Landords. Its like watching a car crash replay in slow motion. How long before Landlords realise the dashboard is coming towards them. Pay off debt. Wait. Be patient. Anathema to todays instant gratification society.

I like how landlords say things like "everythings good in landlord land" (YL) if you have to say that, its probably not. If ever you were making really good money in something, you're not going to tell anyone about it? Let's face it YL, you just want people to jump on the landlord bandwagon because the more landlords there are the more voting power you will have as a group.

Hi Muppett.
I say "all's good in Landlord land" 'cause it's true.
House prices are up. Rents are up over the last few years (albeit only by a relatively small amount). Tenant demand is up. I think rents will rise further and faster in the not too distant future.
Everything is up. And I'm happy.
Being a Landlord doesn't suit everybody, I realise. But I am not going to hide the benefits of property investing. Good on people if they have a go I say.
In truth I don't want people to jump on the "Landlord bandwagon." It would serve my interests best if no one else invested in property. Then all the tenants would have to come to me. My rents would go thru' the roof (pardon the pun). 
What do I need "voting power" for?
Ah yes... all's good in landlord land. You can tell it is so 'cause the known landlords blogging on interest.co.nz are all happy fellas and ladies. Have a look.

Olly makes five pointers to why everything is going to change. (please note in his optomistic direction).
He should remember that nearly everything is as rigid as a piece of string. An example may be that initially rents in Auckland push to move up, but also some renters will just move away or double up with others or go back and live with mum. I still am seeing 'For Rent' signs around. So where are the renters?
Medium term the inability to squeeze more rents will make the price of rentable units softer as will rises in interest rates.
In the end everything has a soft underbelly.

New Zealand (particularly Auckland) is a fantastic place to live so therefore house prices will continue to skyrocket due to the vast numbers of overseas immigrants (from all areas...) who find NZ a palatable place to live.
However, no government can afford to sell out it's inhabitants futures, or preside over the social destruction that accompanies the sell-out of our own land.
There will be an inevitable backlash against a laissez-faire government that does nothing to protect Kiwis (and their grandchildren...). It will be an election issue and there will have to be disincentives against wealthy immigrants buying our land. Once that pool of wealthy investors is curtailed, accompanied by an increase in cost-effective subdivisions, the housing stock will begin to slow its price ascent.

The great street-smart Olly Newland saying "this time is different" - classic!
Perhaps he should read the book of the same name - http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640 "This time is different: eight centuries of financial folly"
He should also stop telling us all our rent should double. Landlord-ocracy softening up the lambs for slaughter?
Unintended consequences. This sort of stuff comes to mind -

Dont believe everything that Olly is saying, such as house prices are too cheap.  If anything, he just hoping to create a self fulfilling prophecy so that he may cash in on the panic.
Akin to the sharebroker who buys into a stock, recommends it in a newsletter and sells into the rally.

daMystery1........yeah we know already, this is one place olly gets booed off regular like . but still gets  the gig for a return show....ha, go figure eh...? that Olly he's a scoundrel  ain't he for sure.
If it wasn't for real estate he would have made a great Carni roustabout...step right up suckers.., hit the donkey in the ass with the ball n get your box of chocs....!
 ya just can't lose flogging a dead horse maaaaate....!

What is also apparent, by his comments on how to get around LVR ratios, is that he has absolutely no concern for what is appropriate, or necessary, for the NZ economy other than is what is good for ON.

Allright Olly, i'm feeling a bit uppity tonight, 
 So for those who want to avoid the coming lending crunch here's a tip or two minus the piffle n spin.
 1 Don't borrow money today that has a better than 40% chance of becoming your losses while your Bankers gains tomorrow.
2. Don't ever assume any trend has a permanent upward trajectory despite what the climate is telling you......
3. give some thought to productive ways to increase your net worth (in real terms) before you commit to a purchase, allowing a cushion at least if housing cools.
4.keep in mind, debt is not wealth unless your the Banker.......and we all know now, how that turned out.

As far as I know Carney introduced similar deposit lending restrictions when he was in charge at the Bank of Canada. I have never read a critique of the results. 
As usual our media's failure to do Canada could result in a disaster similar to the lack of coverage of the leaky buildings issue which they experienced before us. There are many similarities in the Canadian housing market with hot spots in cities like Vancouver and Toronto, while many provincial locations languish like here. Comparisons with places like London (UK) seem of limited relevance.

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