Westpac economists see higher mortgage rates and continued easing of house prices as being an 'important headwind' for economic activity over the year ahead

Westpac economists see higher mortgage rates and continued easing of house prices as being an 'important headwind' for economic activity over the year ahead

The slowdown now being seen in the housing market has important implications for the New Zealand economy, according to Westpac economists.

In their Weekly Commentary, the economists say that "seeing increasing signs of softness coming through in the housing market".

The past year had seen house price inflation slow considerably, coupled with a large decline in house sales.

These developments had come on the back of a tightening in lending conditions (LVRs) and a creep higher in mortgage rates.

"Initially the impact of these changes had been concentrated heavily in Auckland," the economists said.

"However, the latest REINZ housing market report indicates that regions outside of Auckland are also showing signs of slowing materially."

Notably, sales throughout the country have fallen sharply through mid-2017, and by much more than the usual winter lull.

In addition, Auckland prices had continued to fall and are now down 4% since January, while in other regions much of the resilience in house prices earlier in the year across had faded, the economists said.

This had important implications for the economy "given that housing market conditions tend to be a key driver of household spending".

"Indeed, looking back to the earlier part of this year, durable goods spending has been relatively flat.

"With mortgage rates expected to continue to push higher, and house prices to continue easing, this signals an important headwind for economic activity over the year ahead," the economists said.

The Westpac economists are forecasting a "subdued" 0.1% rise in the CPI for the June quarter, which would see annual inflation recede from 2.2% to 1.8%. Statistics New Zealand releases the figures tomorrow (18th).

They said inflation bottomed out some time in 2015.

"Since then, it has risen gradually, though it remains below the 2% midpoint of the Reserve Bank’s target band. This is consistent with our view that while the economy is growing at a solid pace, it’s not at risk of overheating.

"...Putting this all together, it is looking very unlikely that inflation will threaten the upper-limit of the RBNZ’s target band (1-3%) anytime soon.

The economists said this reinforced their expectation that the RBNZ will keep the Official Cash Rate on hold through 2017 and 2018.

"However, this presents a challenge to financial markets, which in our view are too eager to assume that the RBNZ will soon join the club of central banks that are contemplating interest rate hikes.

"Markets are pricing in an OCR hike by June next year."

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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OCR hike in June now. The hits just keep coming now don't they.

Given that the RBA is afraid to increase the official rate as they think they'll blow up the economy I have no doubt RBNZ will want to be cautious. I don't think many Australian households will be able to endure interest rate increases given that a lot of people have taken big hits to their income. I do wonder what state household finances are in in New Zealand.

Joking aside. I agree. Both central banks will be taking very careful steps at this point. If the big bank economist are to be believed NZ households are in a very precarious position being as highly leverage as they are and with our OCR at 1.75 we don't have much Ammo left to fight another recession.

Without the capacity to increase the rate to allow it to be decreased there's a problem for the Central Bank. The OCR is so low that it's below the meaningful threshold. The only people willing to lend our banks money at a low rate are local depositors. The decreased credit rating of the big banks has had an impact.

the central banks allowed the debt creation to occur to stimulate the economy. what surprised them is how long it has taken to get going and how much debt and now there one blunt tool, interest rates can not be used freely.

Toronto House Prices Crash 192k since April.

Auckland Albany House Prices Dive 13.5%

The Crash Is Coming.

Is that June 2018?

Housing isn't really a productive, ion terms of increasing NZs wealth. So not sure it really matters if housing faces headwinds in terms of that. The problem is if banks have problems with people repaying them, and house values drop more than they have lent out, so the bank could lose money if they were forced to sell. But banks would have been conservative with their lending, wouldn't they?

Rob , you are wrong , construction of new houses is a massive part of our GDP and it is productive .

There are tens of thousands of people employed in the house -building and related sectors .

Its speculating in houses using borrowed money that is not productive .

Makes it unfathomable that NZ's National government has for nine years resisted limiting foreign purchases to new builds, really.

What? Asset prices are related to economic activity juiced by household spending?

The cat's out of the bag.

I expect that quite a few people will hang about with great expectation that house prices will fall markedly.....

But house prices won't, in reality, drop too much. It will be more of a plateauing-off in price levels - with well-located houses on good-sized sections holding up reasonably well.

Those looking forward to hefty price drops will likely become increasingly disillusioned as time passes.

For Auckland, I anticipate that apartments in general will fare less well than stand-alone, fee simple properties. Preferred locations such as Central Auckland will continue to be great areas to live in - as well as for property investment. DEMOGRAPHIC factors will over-ride other factors (e.g. interest rates) in the medium/long term.


If Auckland ever needs a representative wizard, that kind of soothing vision would make you a compelling contender. It's not a particularly dramatic prophecy and doesn't really address what the economists are inferring: the economy is being juiced by asset prices.


I disagree. The reality is you have no more idea of what will happen to house prices in the future than the rest of us. That's why a diverse portfolio is so important to avoid over-exposing yourself to a single risk factor. To think that housing is risk-free would be insane.


"In addition, Auckland prices had continued to fall and are now down 4% since January, while in other regions much of the resilience in house prices earlier in the year across had faded, the economists said."

You might want to check your definition of plateau.


After all this time you aren't buying up every property in sight? Why are you afraid to buy property? Why are you afraid to buy property if you believe this is the low point?

Why do you only care about house prices?

DONT BUY ANYTHING .......... this Auckland market is still way over-priced and still has a long way to go down before there is value in it .

Just sit on your hands for 6 months and vote for anyone who undertakes to slow immigration significantly

WOW! 3 rebuttals in 4 mins. I think that's a record. Even for here.

Ok 4 rebuttals in 5 mins now. Well done!!


tothepoint exists in a state of owning a house and not owning a house and wanting to buy. The only commenter that the Heisenburg Uncertainty Principle applies to. This inbetween state of owning and not owning a home apparently cannot be resolved by tothepoint. Such is the state of a person who depends entirely on confidence. A confidence man if you will.

That was an amazing description. My hat is off to you sir!
or madam (sorry I shouldn't assume)

These things happen when you forget which log on you used.
Not an RE, an RE, working for IT, or not, FHB or not.....

Making some curious claims. Perhaps you have forgotten which account you have logged into.

Schrodinger's Prat.

You just clocked the interweb

Ok 4 rebuttals in 5 mins now. Well done!!

No rebuttals at all. None of the comments "rebut" what the economists are inferring: house prices are directly linked to economic activity.

I wasn't talking to you.

And you're not focusing on what the content is communicating.


There you go again with your fortune-cookie forecasting. Nothing you said had substance, sense, or backed up by any type of logic. You just basically said "the sun will shine today" which is true whether it's snowing, raining, winter, summer. Do you purposely ignore logic and facts, or are you so invested in talking the market up that you're happy to play the fool / villain in this here comments section, or do you really not know what you're talking about?


Complete rubbish. Mortgage credit has tightened and will continue to tighten. This is a function of increasing funding costs and banks stricter lending terms. All sectors of the market will be affected, but I agree apartments will be worst affected. Shrinking bank credit will mean a fall in nominal prices. There is no future in house prices in Auckland at 10x income. Owner occupier demand will not support prices at this level: see modest rental increases and the fact that a large part of the owner occupier market cannot afford houses at these prices. The only way is down. How far down and how long is anyone's guess, but a reversion to rental and income ratio means implies 30% + drops.

Any investor taking a "long term view" and not exiting the market when prices are 10x income is greedy or stupid or both.

I am greedy, stupid and in my villa in Bali right now

Don't forget Yvil thinks she's an architect too.

...and I own a Motel as well, land buildings & lease

I'll be the judge of what you own and don't own thank you!

But yes, you can have a motel.

Don't say I don't do anything for you

In my garage I have a Ferrari 288GTO, a Lambo Aventador, a 1967 Merc SL Coupe and a Lockheed Martin F16.. all 1:24. So I can say own a few things.

I used to own a vast investment portfolio, including 3 train stations, but landed on Park Lane so lost it all.

Geez you guys post some rubbish

Have to balance off the bullish property investor rubbish. Difference being, no one is risking their shirt reading my posts.

I have a saddle-trained Tyrannosaurus rex. Don't be getting in my way on the Harbour Bridge, bitches.

Actually, my comments above are absolutely true but it's amazing that if someone has a few nice things and dares to say so, nobody believes it. Yes I did scythe a bit, because I was getting fed up with some shallow comments

Stop telling everyone about my things. There mine and I'm being very nice in letting you use them!

Don't worry. We're still friends =)

Yvil, you have my absolute sympathy. Nothing wrong with some good boasting and remember "Greed is good!"

Well done , must be nice and warm --enjoy

Thanks Eco Bird,
Interesting how successful people are happy for other people's success
Unsuccessful people on the other hand are envious and love to cut others down

It is a shame! But I promise to work on it with you Yvil and some day you too can be as happy as I'm! =)



Interesting how insecure and sensitive self-proclaimed sucessful people are....thought given how successful they are it would be water off a ducks back!

You keep being successful Yvil - it will be good for your self esteem...! Us losers will keep being unsuccessful and avoid attempting to rationalise irrational markets because we know this hurts your feelings. But don't worry about the losers who are unsuccessful and don't have a voice - the fortunate of which are those living in your motels, paid for by the tax payer - and as for the rest, well they are living in garages, cars and on the streets. But keep up the good work, your 'success' story is an inspiration for the rest of us kiwis (and others with chinese sounding names) to aspire to.


What kind of person feels the need to troll while on holiday in bali? Odd.


You beat me to it-that's just what I was thinking. In a past life,I offered financial advice to some seriously wealthy people in the UK and found that the longer they had had money,the less they talked about it. Only those with very recently acquired wealth felt the need to TRUMPet their status.

@ Bobster ..Your prediction does not hold water either and your Maths are too simple, you forgot few things / possibilities:

If history is to be considered and taken by ...in times like these house prices correct mildly after a big 60% appreciation and stagnate for a while maybe a couple of years UNTIL buying appetite kicks in again and buyers can afford the price at that point in time!! - so never in history property prices came down to the level of current affordability, they will meet somewhere closer to the price of the day not the average wage income level!! - when the economy and employment are going well then chances of people advancing in life are much higher than in a declining economy and doubtful state of employment or availability of better opportunities to advance - Not everyone is working for the average or min. wage.
8 or so years ago house prices were 4-5x average income and a lot of people still could not buy houses then - even in 2008-2009 when market was falling a lot of people were waiting for it to be absolutely smashed - Property buyers in those years are Laughing all the way to the bank when they sell their house today.

People who are immigrating or coming back to NZ to roost, be that expats, AUS, UK, and all ... (you will actually see more Poms after the wave of acid spraying on innocent people in the streets that is going on there ATM !! where your face and life can be ruined for no reason.. just a reminder why NZ is the best place to be in ATM). Point is that these people ( coupled with the current supply shortage ) will be competing with the locals for houses and are already at a better level of affordability - that itself will dampen house price correction and prevent it going through the floor (30%) as you might have expected!!

The next important thing which you missed is that PIs are neither fools nor stupid, if you identify anyone looking for more business as greedy? then absolutely, they are Greedy, and there is No better time to buy than NOW - they follow some choices which are sometimes hard for others to understand ... but that certainly does not make them fools...!!

I am not talking the market UP, no one will achieve anything by doing that, it will be like pissing in the wind - but there are alternative arguments and analysis of the markets rather than bashing a group of people with different views .


With all due respect....that was jibberish

to quote you:
"you are still counting $$s and cents in a a+b=c equation with pure common sense and logic .... But that is not how property investors think and act !! "

So I am not sure you can call @bobsters maths wrong.

Also, "If history is to be considered and taken by ...in times like these house prices correct mildly after a big 60% appreciation and stagnate for a while maybe a couple of years UNTIL buying appetite kicks in again" reflects a complete lack of understanding of market dynamics. You are referring to recent NZ history and not worldwide history.

The risk factors actually increased by NZ not having a proper correction post GFC.

House prices are linked with affordability - one way or the other. If people cannot afford to service debt on the asset, the price of the asset comes down. For investors - if the rent (yield) earned on an asset is not enough to justify the capital, the price comes down.

Price to Income is an internationally accepted and verified determinate of risk.

The IMF have warned about it, OECD warns about it, RBNZ warns about it, Ratings agencies warn about it... but they are all wrong and you are right.


It's scary -- indexed to 2010, NZ is at 135. Worst by far. Switzerland and Austria in the 120's; Canada 115.

Actual history for context:

Ireland was 144 in 2007... down to 100 in 2010.
Denmark 129 in 2007...
USA 124 in 2007

Spoiler alert, no one's chart goes so high so quick without some correction within 2 years. This is scary stuff and we should all be worried!

Please continue to be worried, that actually helps my business !!
IMF and OECD eh? ... :) ... keep up the research hopefully prices to come down as you say !

You forgot to put air quotes around "business"


I foresee that people will continue to purchase houses for prices which they believe they can afford, at greater or lesser rates than they currently are. I prophesise that solidly built houses with qualities that people look to acquire, in desirable locations, will continue to do relatively better than poor quality houses, with no positive attributes in bad locations. Finally, I predict that over the medium to long term, things will be different to the short term.

What I do not predict is that house prices will drop, plateau and hold up, all seemingly at the same time. That would be silly.

I tend to agree CM and absolutely agree with the properties purchased well in good locations with desirable points of differences will hold their value better than dumps bought on speculation. I saw a 3 bed unit on a cross lease in Highland Park sold in Jun 2016 for $860k is now being valued on trademe property insights at $770k ouch.. the system is an interesting beast though, with a lot a stake it is interesting to imagine what banks, big business & the goverment may do to stimulate things


I think your sarcasm-meter needs tweaking...

I think it's missing completely.

I bet a fairly high proportion of sales from March to November 2016 were "dumps bought on speculation" and will be in a similar predicament.

Behold, a modern prophet. Hail!

Very well said CM

And another one who's lacking a sarcasm detector, psychologists might say it's something to do with a lack of empathy?

Much experience with psychologists? =)

Are you implying that if you know psychologist you must be a patient?

Do we need to have the 'conclusion jumping' conversation again?


Please. That was the highlight of my Sunday.

Synchronized Conclusion jumping is an exhibition sport for 2024 Games.

You guys could have the early onset of dementia apparently - https://www.dementia.org/cant-discern-sarcasm-lies

That's my care in the community done for the day, you're welcome.

Demographic change is likely, as Auckland doesn't build enough housing. All the cities that compete with Auckland have built way more for 3 - 6 years, creating a good supply in the region. Why will any person or business stay in Auckland and pay high rents?

@tothepoint Interestingly this time last year the same thing was said about Melbourne apartments market.. Melbourne CBD and surrounding areas will continue to be great areas to live in and investment ya di ya.. now you can have some CBD apartments at 20-25% less than what they have paid 12 months ago. Auckland is no different!

Yes it is, because everyone wants it to be. It's the best city in the world and even though you get paid less and the houses are damp and old, everyone will always want to live here forever #makeaucklandthebiggliest


But that's the same thing they said about Melbourne too.. " The world's most livable city"...

First I said house prices never go down.

Then I said it would only impact crappy houses.

Then I said it wouldn't touch the high end.

Finally I realised this time wasn't different after all.

This is headwind for big banks' profit ,but great for the people

Why do these "economists" earn the big bucks when all they appear to do is use the rear-view mirror.

A year ago they were predicting business as usual yet most commentators on this site have been sounding warning signals about the housing market, and it's wider implications, for at least 2 years.

Now, after a year of prices plateauing/falling they predict "headwinds for the economy". Genius!

Ignore economists. They report the known and the obvious. I don't rate any of them in NZ.
Instead, read Taleb.

As Auckland is encountering stiffer headwinds than the rest of the country, will this cause an internal migration out of Auckland? That would be a significant demographic change in the relationship of Auckland to the rest.

I notice that any mention of DEMOGRAPHIC factors sends shivers up the spines of certain people - such as those who have commented above.

Sorry folks - but nothing you say here will make it go away. Mark my words.

Marked. We can reconvene in a couple of months.


House prices are determined by how much people can pay for them. That is a function of how much capital that purchaser currently has and how much they can borrow. How much they can borrow is a function of their ability to service that debt with their income and how much a bank can actually lend ie it's balance sheet strength. The fact there are 10, 100 or 1000 people in a market for houses does not set the price: it is how much capital they have or can borrow. If the amount buyers can generally borrow changes from time to time, then the general level of house prices changes. It seems to me we are now in a cycle where the amount people can borrow is reducing. I am sure you can work the rest out from there.

Absolutely spot on bobster. Prices can only reach the point to where people can afford the monthly repayments/save the deposit. The highest paying jobs in NZ ranged from $75k - $135k. Eventually $135k just won't be enough to support the payments for high earners. They would then be forced to live in the boonies. And is that right that the highest earners might have to live along side the drug dealers?

To break it down in easy school boy mathematics (just for tothepoint). My 8 year old could actually understand this. If you get $2 per week pocket money (this is your income) and a bag of lollies cost $1.50, you can afford lollies. If the bag of lollies keeps going up in value and they become $2.01, you can't afford the lollies.

Exactly, a $1m house, with 10% deposit is $5.5k monthly payments, that's $66k per year after tax, that's already putting pressure on high wage earners, it's $6k per year more than someone earning $75k can pay for example, let alone anyone else, and that's not factoring rates, insurance etc..

With a 20% deposit it's still $4,771 per month and that's at current low interest rates.

It's a ridiculous scenario, that excludes critical professionals like teachers, police, nurses from owning property.

Edit - and that was a 30 year mortgage based on Westpac's current rates.

I agree, those numbers are eye watering. It's a good example of how current prices are not supported in any way by owner occupier demand. The average wage earner cannot afford the average house.

Take a look at https://www.careers.govt.nz/jobs-database/whats-happening-in-the-job-mar... which shows you what people are earning. Easy to see that it can't support where prices are now, and can't afford them to go up any further. The prices are crippling the economy long term. Massive monthly payments are going to the banks instead of people having discretionary spending money to spend in the shops etc.


Scary. And I totally agree with u. This bubble is consuming just so much political energy, it dominates the national conversation and so many of our commercial decisions, and when it unwinds more or less we will be left with....nothing to show for it. It's a gross misallocation of our national resources.

Its not about common sense, its not about logic, its not about affordability, its not about FHB, its not about NZ economy, its not about productivity. House prices go up even if the last few years are an anomaly, and they go up no matter if it outstrips income by 20 its all based on history, the last 4 years.

All you logic speaking people are jealous of a few property buyers, who love patting themselves on the back when the capital gains were going through the roof, but now there may be a correction, there is no correction, only jealousy. Thats what you do, you walk around and worry about a few individuals you dont even know, you dont worry about your own life, your kids, your country, why would you care about that.

Very well put, Solidname. I am glad there are still some realists like you in this world. Numbers don't lie.

People borrow with Household incomes, which for tertiary educated career minded couples I know in Auckland would comfortably exceed $135k in their 30s and are likely closer to $250k in their late 40s. When the gravy train stops in their 50s/60s they sell their houses to the next couple coming up the ladder and retire to one of Heavens Holding Pens in the regions; the choice depending on how well they did. It's completely logical.

That's exactly what should happen except there's a bottleneck where people have decided they want their cake and other people's too.

Only in 1071.

Ha, true that, although I think this might be the gateway to the gateway of heaven's gate - next stop St Heliers! Talking of St Heliers, you mentioned a French restaurant there, that I haven't been to, could you remind me again? I enjoy the Thai over there, but must have missed the French place unless I'm completely blind - which quite frankly is probably the case.

It's called La Fourchette on Turua St where the old Spanish villas once stood, but were bulldozed for retail a few years ago. They have live French music every Friday, very La Vie en Rose so to speak ;-)

Ah yeah got you, behind the library? Haven't been so will give that a bash.

I think it's near the library. Are you a local?

Had my son's 21st there on Saturday. Complimentary drink as it was the restaurant's 4th birthday. They managed to serve a table of 23 and not one complaint about the food. Didn't realise there was a live music night.

Yes, much of the Bays is Heavens holding pen. I recall seeing a stat that 78% of houses are owner occupied. Typically those that stay are both mortgage free and have the spare cash to enjoy the lifestyle, which fills the Bistros and La Fourchette. With seaview apartments around the park selling for $2m it's a different downsizing market to those moving to the regions from other Auckland suburbs.

Checked stats and St Heliers was 75.4% owner occupied in 2013 whereas wider Auckland was 65.1%.

What about 1050?

Which part? Remuera South is 65.2%

Of course I am living in the Northern Slopes, not the south side ;-)

We never considered Grammar as a schooling option so we don't know the boundaries. You'll have to google that yourself.

Except the median Auckland HH income is not $135k-250k

Remember too , at some point in time most do want to start a family (certainly the sort that buy standalone OO properties).

According to the 2013 census 120 people lived on the City facing section of Paratai Drive and had a median income of $33,300.

Another data point are the 51 people living on the cliff above Mission Bay, who had a median income of $60,000.

Yet another, where Dan Carter just purchased has 210 people with a median income of $46,700 each.

Seems like median income stats don't have much use in explaining how those areas houses are afforded.

Very well said Biobster

I don't think you read their comment correctly.

Sorry Grendel, I forget that you know me better than... I do. You are right, you must be right

no problem

I notice that any mention of DEMOGRAPHIC factors sends shivers up the spines of certain people - such as those who have commented above.

The economists make no mention of demographic factors. If you think they're wrong to say that asset prices can negatively impact the economy, then explain why. I'm all ears.

House prices are determined by how much people can pay for them. That is a function of how much capital that purchaser currently has and how much they can borrow. How much they can borrow is a function of their ability to service that debt with their income and how much a bank can actually lend ie it's balance sheet strength. The fact there are 10, 100 or 1000 people in a market for houses does not set the price: it is how much capital they have or can borrow. If the amount buyers can generally borrow changes from time to time, then the general level of house prices changes. It seems to me we are now in a cycle where the amount people can borrow is reducing. I am sure you can work the rest out from there.

I think that the economists are not referring to how much people can borrow for houses, but how asset prices influence consumer spending.

I was referring to the influence of the credit cycle on house prices, which is a different issue. Demographics influences demand, but the level of house prices is largely determined by the amount of available mortgage credit. For the majority of people, if you can't get the mortgage you need, you can't buy the house. If credit falls, house prices fall. If you u have a credit bubble, you have a housing bubble.

Wrong again Bobster, a small correction : "if you can't get the mortgage you need, you can't buy the house. " !! Well , then someone else will buy it who can get the mortgage !!

"If credit falls, house prices fall. If you u have a credit bubble, you have a housing bubble." and so will there be sunshine tomorrow -- a lot of IFs and simple Maths

IFs and simple math is your domain right?
How dare Bobster step on your domain! You learn them good Eco Bird!

@ Eco Bird. Let's play that scenario out for a little while, we'll keep interest rates, wages as a constant just for the purposes of this. In this hypothetical scenario houses keep rising and only a select few can buy houses, which is what I think you're suggesting will happen.

Currently we're almost at 50/50 renters/owners (I'll include investors in there for now). FHBs can't buy, so "investors" buy, that tipping point from majority owners to renters isn't far away, it's already with us amongst younger adults.

Once that tipping point hits and "generation rent" hit the majority what do you think would happen politically? Would they

a) want to continue as they are,
b) want to vote for change, including stipulations on rentals
c) another option.

I'll put my neck out here and say if things continue as they are, we're two election cycles away (2020) from renters out-numbering owners, some are happy to rent, others are I'll coin a phrase here "Resenter Renters". Again I'll make a prediction - unless the market changes naturally then it will be made to change politically.

Let's add to the scenario of the greens getting their way with 40% tax over $150k, chuck in labours ring fencing of losses from rentals portfolios, perhaps a building wof, increased rates to pay for all that infrastructure......doesn't look good to me.

:) .. everyone is allowed to dream away, funny you mentioned the Greens, lol so you think the Honest NZ people will allow a fraudster ( a dishonest person to say the least, in the view of many NZers today) to become a minister of the crown and get away with defrauding the same system she is sworn to protect !! and that everyone will forgive her being "Honest" and not even discouraging her followers from doing the same ... is there any deeper Gutter to descend to than this ? who would vote for a party that supports such nonsense !!? .. WP will be having real fun !!!

You also have the right to believe that Labour could put in practice what they are luring some into voting for them - you honestly believe that whoever is elected will have a free hand to do what they want without having the "real players and the deep state" alongside ??... if they were to be elected at all ??
I will not say wake up , but will say get real !!

So you reckon that the next Party(s) will change Fletcher's and Carter's control of building material prices ( up by 17% last year - reviewed every 6 months) or will control land release and supply owned by local councils and big private landbankers all around NZ, You think that we are going to turn into a Venezuela or a banana republic overnight when Labour/Green and co will assume power? really..? is that what you guys are betting on?

well definitely , because most of you are either very naive or too young to remember how these same parties behaved when they were at the wheel .... be prepared for tons of excuses ( if and when that happens - God forbid) be prepared to tons of arm twisting and blaming a falling economy on the previous Government ( they are excellent at that) , and be prepared to get disappointed by the amount of kindergarten type conflicts between coalition partners and be prepared to be disappointed for not realising what you have been promised of having .. an easy ride toward owning your own home ( thanks to them) ...

Objectivity is a path to wisdom, Blind faith gets you Nowhere.

The continuing presence of Bill English indicates that the public are entirely comfortable with a fraudster as a minister of the crown.

No shivers, but you are making a half-argument here. More people =/= higher house prices, life is more complicated than that. For example, the UK has a similar land area to NZ, about 13x as many people living in it, yet the average house price in New Zealand is ~50% higher than in the UK.


The use of capital letters has been statistically proven to send more shivers spinewards than merely using lower case letters. The use of capital letters for vague terms even more so. In fact I guarantee that ECONOMIC factors are sure to have an impact on house prices.


Is that why your name is in capital letters CM ? lol

Demographics is complex. One can argue that demographics present potentially both headwinds and support for housing.

House price falls may hurt some who may have purchased at the top of the market in recent years, but it does provide opportunities for others to make a lot of money. In order for people to make decent money from housing, someone has to suffer. In recent years, it is buyers who have to pay over the top for their tin roofed shack.

and only 2 months to the election. BE could always count on great timing amongst his long line of abilities.

Well for 9 years he was watching and learning from the Master. Will Bill time his exit with the same precision as his ex Boss? As with everything, time will tell...

A Sir Bill, or a Gerbil ?

Inflation is going to remain low and between the target band of 1-3% sitting at the lower end. Oil has fallen, commodities lower and tradable inflation and resent economic data weaker then expected. Leverage works well when house prices are going up and cheap money to borrow, but have a nasty impact when housing starts to fall. Higher offshore borrowing costs and election around the corner then certainly headwinds will prevail in the NZ economy. Don't stand in front of a falling knife and try and catch it. Patience is the name of the game!

Maybe Westpac is getting this entirely wrong and the falls in Auckland are merely a realignment of investment away from Auckland. Perhaps this is a good thing for the NZ economy.

Auckland couples extremely high costs with inefficient transportation, a basket case of bad planning. Any long term flow of capital out of massively over-priced Auckland to the rest of NZ could deflate house prices and at the same time improve economic performance.

How is unaffordable housing good for the regions? I do agree with Auckland being a "basket case of bad planning..." I don't know where the middle ground is, but on either side of equilibrium is catastrophe for NZ. A housing collapse will be a disaster and put us in recession. Increased housing costs while making some wealthier will increase inequality, which will escalate crime... see Auckland's future in Johannesburg and Mexico City. Not to mention all the other issues like homelessness and poverty. I see a recession that side too.
Sir John Key, will have a lot to answer for in twenty years time, when people forget what a 'great he'd be to have at our barbie!'

The regions build housing 25-50% faster than Auckland, if investment flows from Auckland to the regions it creates that much more work/economic activity.

Bobster , or can't exit the market because he's under water already, so stupid and very hopeful about something, so talks the market up constantly with no grounds

Bali, shit hole

Green with...

a) food poisoning
b) surfboard bag filled with "medicine" = free room and board in Bali for 20-25

Don't knock Bali mate I love those dog kebabs they serve up to unsuspecting tourists.

Green with...

Is it envy? You don't have to be envious of me Yvil. If you work really hard in a couple of years you can be a real property investor.

But don't buy anything at the moment. The market is really bad.

You're my hero..

Thank you my friend! It's tough sometimes. But when I think of all the good I'm doing, I know its worth it!

We await a true hero, Beowulf!

=) I won't pretend I'm not a little happy someone got the reference.


O yes that's it, if I had a $1 from every guy that said the misses is dragging the family kicking to Bali I'd have enough money to buy a beach house in ozzy, mine got me there ONCE, seeing people throw money on the ground to people was all I could take

I'm in Bali in MY villa, emphasis on MY (you may have missed it, it's part of being a property investor)

Actually it's MY villa. I thinking your getting a little ahead of yourself my draughtsman friend.

what's the name of the villa ?


Nice. Of course, I see from the listing "you" tried to sell it in 2010 for $17m but it failed to sell, as last recorded sale was $9.5m (cheap as!) in 2005.

Rates must be a killer!

Here's mine, ow- only paid $2.2 million in Remuera... on 100 square metres and I have to use Double GZ's toilet and bathroom.

I think even Zach-DGZ et al, will agree that's a bargain for Remers. Just think of the capital gains if you put a loo in. Though am sure DGZ won't mind you using theirs till it's in.

The $2.2m would be for the land value alone. So this is actually quite fair (and standard) price for the area to be honest.

Its name is what ever I say it is because its mine, obviously, Wow... the educations system now a days, what a shame.

Oh god here he is


I'm sorry I wasted my time on grendel, I'll make sure not to make that mistake again

Yes you will ;) because we're friends now

If the comments on Interest.co are anything to go by NZ is facing a huge division and not a particularly pleasant one. The election is going to be very interesting, I am voting WP.

"If the comments on Interest.co are anything to go by NZ is facing a huge division and not a particularly pleasant one. The election is going to be very interesting, I am voting WP."

Hey thats plagiarism mate, I wrote that yesterday......well all apart from the bit about voting for WP ! lol

The new posters here e.g. Grendel, propertyminx and Solidname are very active for newbies.

Agreed! Grendel even claims he is my neighbour in 1050 but I can't see why not LOL

I'm legit, it's quite addictive this place, some good, enjoyable banter and ideas.

I'm quite enjoying that in this thread everyone's just said 'screw it' and unleashed their inner smart-arse.

Actually, all my comments were not "smart arse" and absolutely true but it's amazing that if someone has a few nice things and dares to say so, nobody believes it. Yes I did scythe a bit, because I was getting fed up with Grendel's shallow comments

OMG whine whine whine whine whine. Do try to be less of a self-important pompous arse.

Holiday house in Pauanui

Mine too, also you need to be out of my villa by August. I'm having my birthday party. You can stay next door. Also clean the pool.

This reeks of neediness and insecurity to the point that it's quite uncomfortable.

I like how Yvil complains about shallow comments and then follows up with another one of their own shallow comments.

and then there's eco bird ;)

Oh how we miss Ted. He kind took the heat off everyone else with the best worst posts ever.

Wait until after the elections... and spring.... and the summer/Christmas break... and after Easter... then you will see Auckland prices double in six weeks... but of course if they don't... just wait until after the Chinese New Year!

I'm with you Solidname, it is quite addictive. So much so I'm going to take the first step and admit I might even have a little bit of a problem.

Rental properties in the poorer suburbs are falling in value however if there's a Labour/Green Govt after Sept and Greens get to implement their 20% payment increase to beneficiaries then this could be an opportunity for landlords to substantially increase rents on those properties.

If that post's not satire, then it's the grubbiest, most opportunistic statement I've seen in a while, I think I need a shower just reading it.

but it is true, rents increase in line with the ability to pay.
so as you increase supplements, benefits, wage rents will increase to the point where they are no longer affordable, and the landlord needs to retain a quality tenant then they will stop rising
that's what the greens don't get, its only a short term fix and the money paid out passes through and causes other issues down the track.

I suspect you're right in the current climate, but that sentiment is pretty rancid. I think they're also investing (reinvesting) in social housing as well, quick check on site and yes they are https://www.greens.org.nz/page/housing-policy not sure that 3,000 a year replenishes the stock sold by National mind.

Perhaps a better policy would have been a commitment to increase the supply of state housing thereby reducing the demand which results in rents reducing and a policy that encourages more competition in the supermarket industry.

They have, by a minimum of 3,000 per year, completely agree with the supermarket angle, the current duopoly and disaster with Nosh is terrible for grocery prices. Hopefully Aldi will make the jump over the ditch, Lidl are heading to AU as well, they're both surprisingly good, as soon as you recognise it's completely pack it yourself, which is a bit of a culture shock in the beginning!

Exactly the sentiment that demonstrates why our tenancy laws absolutely must change and why the business of landlording needs severely knocking back.

I don't usually swear, but this is bullshit. What you're talking about is people farming, no more, no less, and is representative of the disgusting side of landlording, squeezing the poorest until they squeak, and making money directly from the taxpayer's purse.

Investing in residential property, by and large, is nothing more than people farming, and I have called it as such for a long time, and our tenancy laws and legislation around it all only serve to encourage it.

You all need to stop being so righteous.
You are attacking the investor for reacting to incentives made by the central government.
Persecute the policy, of which you all are responsible for, not the agent who adheres to it.

So much anger directed at the investor... whilst the banks and their stakeholders hide in the shadows cackling at us all.

No jokes here, serious question;

Why do you think banks are the bad guy here?

Nothing said about any bad guys- my bank donanted $12M back to the community last year which is a whopping 0.3% of their total revenue for the year, that's the real reason why I love to pay my fees.

You have a point there, nymad, about responding to incentives and market signals. As an investor, I do the same when considering what to invest in. The difference is that I use my sense of ethics to help make decisions about what to invest in, and deliberately steer clear of some areas (direct residential property investment and residential investment via REITs being one of them), whereas some appear to have not a single ethical bone in their body.

It's always appeared funny to me that wealthy libertarians focus on freedom of choice and personal responsibility, which leads them to criticise the life choices of poor people. These same libertarians then turn around and imply that they themselves are simply (and somehow 'helplessly') responding to market signals, when criticised about their own dubious investment choices. How do you reconcile that? It smacks of a little hypocrisy, if nothing else.

Agreed! Although I think of myself as a capitalist and agree with the basis of nymads comment, I think it’s a real shame that in our society we need external forces applied to the market to stop us from hurting each other.

Anytime you work for someone you are being people squeezed, not just in housing, I'd rather a private landlord than a government overlord in a scummy estate house

INTEREST rates in the 2002 to 2008 boom were up to 8.5 % by the time we got to 2008, can't remember how the rises were done I guess from about 2006, Auckland started getting "unaffordable " , had all the normal signs that rates should have started lifting around 2015, if they had looked after locals first by lifting in 2015 prices would never have gotten anywhere this high making the need for nzers to take the pain pill and drop house prices back , only to help the few that brought and SOLD, because everyone that didn't sell more than likely won't make any money, I can't see the reasoning around the time the RBNZ and am guessing the Brains around these reckless decisions John key, to use such a nz normal tool as lifting interest rates, now we have housing coming down with no help by lowering interest rates from I guess around 8.5% , big help, but no, not only that the talk is rates might go up, we can get all technical but nz shouldn't even be in this situation right now, and if labour were to get in and put us in a little pain for a year or 2 and reset this hole thing all the better, nz was good when family's were buying homes they could afford and have a little spare money at the end of the week and buying investment property's around nz for around $250 to $500 or help your kids in a house used to be good, long term, o4 normal again

Its a shame nz has moved away from the interest rate tool that has served nz well forever, to have the idea and have to let house prices go threw the roof so we can afford to build new houses because of mad costs for a population level we are making , what ever happened to slow and easy , immigration even overseas investors is ok, but slowing, in 2015 just a little start of lifting interest rates and immigration and overseas investment turned back a little housing more than likely would be a lot lower then now and no correction, this government needs the boot, also people would be buying those thousands of houses generally for sale because they could of afforded them, what shortage

My God there are some scum on here. What an incredible set of ethics and morals.

Has anyone noticed how Waiheke has effectively doubled some 2012? And who said you couldn't make money off a beach house! David will put a sportsman bet that interest rates don't go up till December next year, P.S great time to buy in Auckland now!