Westpac almost doubles its forecast for house price growth this year to 11.5%, but warns there could be consequences with new mortgage lending restrictions possible

A 5-8% rise would be acceptable had the past 5 years also had increases of 5-8%. However, that hasn't been the case, so a correction or flattening, for the medium term, is neeedd to bring this back into order before the risks increase even more.

I see Australia's employment figures starting to improve - could start to slow the net tide between NZ and Aus. Would be very interesting what a few months of low net migration would do to the property market (as the current pricing has a LOT of net migration factored in for a very long time into the future).

not a good balance for me. Give me a 40%-70% decrease and I'll take it.

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the 20-30% deposit requirement hurts FTBs hard. It will all look rather silly in 4 years when FTB schemes come in to help them. FTBs should have a 10% deposit requirement and a few other rules attached. I.E cant rent out for "x" years etc.

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NZ is still cutting rates. The Poms used that trick 5 years ago. Still need a FTB scheme, bank loosening deposits to 10% before the FTB pool dries up. I live in London and in my area prices have gone up 3% in the last year. This is what the Govt is after. If you need a crystal ball study whats happened in London since 2010.

All that is going to do is open the market for overseas investment where the LVI is irrelevant; money is money. Auckland (read: New Zealand) is ruined and the only way to fix this catastrophe is put some extreme measures in place. Borrowing money using equity is cheating.

Thanks doublegz. I went to a single property auction and can report that there were no bids from the floor but there were a couple of phone bidders from people speaking Mandarin. I'd love to know where they were located. The property reached 29% above CV before passing in. It had a sold sticker on the sign the next day. I think buyers generally are being a bit more cautious and they are aware of how much over CV is reasonable for the location...as do sellers.

What is infinite is human resourcefulness and ingenuity.

Did that occur in 2008? In the US and other places it did, Why not NZ? Was it the non resident access to buy here? Was it no subprime? Was it our 'wonderful banking system'? Was it our fantastic employment and production numbers?

I'm not playing devils advocate here. I want to know what people think has primarily lead to NZ's bubble continuing? Sure there was a small pause....

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I cannot tell you how happy I was to see the article in the Herald this morning. That was almost the first thing I have seen in the media in this country giving young people a voice. Well done The Herald. My gut feel is that there will be growing pressure on the government to do something. How can people organise themselves to start really applying that pressure? Or maybe the media will wake up to the needs of the young rather than the ridiculous stories on how marvellous it is for NZ that house prices are rocketing up so much.

Yes!

Have you seen the article in the link below?Look at the second video with the interviews then come back and tell me what you think. You can't apply your judgemental morals to this situation. You imply that young people's lifestyle is the cause of this situation. That you are successful purely because you worked harder. http://nzh.tw/11623505

You just need more contact with the real world ZS. What you find is that a lot of young people don't have work, are studying into their mid 20s and what work they do get has terrible pay. My parents at the same age as I completed university had 3 children and a mortgage. There's a big difference between working for 8 or 9 years versus full time studying and starting out with debt. My student loan was repaid over 7 years while paying about 9% interest.

Basically this put me financially behind by 15 years compared with my parents. They also benefited from the low cost of living and buying up cheap houses.

The thing is the young people starting today are in an even worse position as student loan debt is a lot large compared with when I was at university, even though the loans are 0% they will spend more of their life paying them off. Most may be starting off life financially 20 years behind me and 35 years behind baby boomers.

What these large debt obligations do is break down social constructs, then mix in low pay and unstable job positions and you end up with today's mess. What is frustrating people is when they commit to self sacrifice and discipline they find they are hardly making any progress.

With the people I help sort out their budgets and debt problems once they start tackling their finances there are interesting results. For the ones on a high income some discipline will fix their problems in 1 or 2 years. Those on lower incomes take years often 4-10 to resolve their debt problems. When people make bad financial decisions they compound the problem I described above.

Easy access to abusive forms of debt and marketing for the consumer economy are very damaging to our society. What you have described is the result of this not the other way around.

So what you are saying is that house prices are high in Auckland, because a family with two working adults, can afford to pay more than a family with a single working adult. This is true, but in the 'old' days, many families, even with two adults in them, only had one adult working. So in the old days, it should have been as easy for a single person, to buy a house, than a family. Also people are buying houses based on what the bank tells them they can afford to borrow. So they are competing against people in identical situations, earning similar amounts, so people are bidding up to that maximum to secure the house. The problem is what happens if one loses their job, or interest rates eventually rise , say to over 8%, which historically is still very low. But we have now had a generation who are used to low interest rates, and don't remember when they were over 10%

IMO the housing crisis in Auckland is being fueled by a perfect storm of conditions.
- Historically low cheap credit
- Banks willing to lend to people to buy these overpriced shacks
- A lot of overseas money and investors buying houses
- A lot of mum and dads who have got money in bank accounts, after being bitten by the finance company collapses.
- Influx of cheap money from overseas that the banks need to lend out. If the banks don't lend, they don't make money.
- A shortage of quality houses
- Greed

You only had to watch that home program on TVNZ. Someone buys a house for 500-600k, spends 100k doing it up, and expects to sell it for 1 million. This is just for a small basic house! In some parts of NZ you can buy a small mansion in comparison to that.

I think it is going to end in tears when the bubble deflates, but I think it will be the mum and dad savers who are going to take a bath, as the property market is really too big to fail.

Really it needs government intervention, and one of the first things should be stopping overseas people (non NZ residents), buying existing housing stock. If they are buying, they should buy only land to build on. They already do this in states in Oz, and it makes so much sense. It also means that overseas buyers will mainly be buying in more fringe areas, so their oversea money can go into building up the infrastructure in the fringes.

There are quite a lot of chatter on the net about an upcoming financial crisis within the next year, more chatter than I have seen for quite some time. Anyone else noticed this too?

I wondered about that! Can't say I'm sad really.

The trend is upwards

here you go, now you will see why they only pay lip service to house prices and investment properties
http://www.parliament.nz/resource/en-nz/00CLOOCMPPFinInterests20161/2b6…

I think Labour MPs? exited / were told to? from property (housing) some years ago? --edit-- by this I mean some owned large strings of properties...not the odd 1 or 2