Greg Ninness takes a look at the concept of the RBNZ having a debt-to-income ratio tool and the Government banning foreign house buyers and says bring them both on

Greg Ninness takes a look at the concept of the RBNZ having a debt-to-income ratio tool and the Government banning foreign house buyers and says bring them both on
Foreign buyers poured petrol on an already overheated housing market

By Greg Ninness

The residential property market is in the throes of major change as the Government grapples with ways to address problems such as a shortage of supply and affordability issues that accumulated over the last six years.

Those problems, and the measures the Government is proposing to tackle them, continue to attract plenty of scrutiny, most recently from within the lofty towers of the International Monetary Fund (IMF).

In a nutshell, the IMF said it liked the idea of the Reserve Bank being able to set debt-to-income ratio (DTI) limits for new mortgage lending by banks, but wasn’t so keen on the plans the Government already has in train to restrict purchases of existing residential properties by overseas buyers.

The Reserve Bank has already said it wants to have the ability to introduce DTIs but the Government is not keen, so the IMF’s support for the idea was probably a welcome development for the Reserve Bank.

One of the principal functions of the Reserve Bank is to protect the integrity of our banking system, particularly if there was an economic shock that resulted in a sharp downturn in the housing market.

Housing makes up 58% of total bank lending in this country so if there was an economic shock which caused a surge of mortgage defaults, this could have serious implications for the health of the banking system and the broader economy.

Irrational exuberance is a phrase that’s often been used to describe consumer behaviour during housing market booms, as buyers pay ever higher prices for properties in the expectation that prices will keep going up and they will reap ever increasing capital gains.

But the phrase could apply equally as well to the banks that provide the mortgages to fund those purchases, driven by the extraordinary profits that can be made from loans which now typically run for 30 years.

One of the ways the Reserve Bank tries to rein in this irrational exuberance, or conversely to stimulate lending, is by tweaking interest rates.

But the usefulness of this tool is limited, because if New Zealand interest rates get too far out of sync with those in other countries, it can impact things such as the exchange rate which in turn can affect imports and exports, capital flows and the amount of interest our government has to pay on its overseas debt.

Another more recent tool in the Reserve Bank’s arsenal is loan-to-valuation ratio (LVRs) limits, which restrict lending to a proportion of a property’s value.

These are useful if there is a decline in property values and a bank has to force a sale when a borrower defaults on a loan.

Having an LVR of say 80% of a property’s value means the bank is less likely to suffer a loss, or will suffer a reduced loss, in such an event.

The borrower of course is not so lucky.

But LVRs are like an ambulance at the bottom of a cliff.

They only prove their worth after a default has happened.

DTIs on the other hand are like a fence at the top of a cliff.

They are designed to make a default less likely if a borrower strikes financial difficulties.

Some people assume that if DTIs were introduced they would automatically have a negative impact on first home buyers, but that’s not necessarily the case.

Firstly you can’t assume that if the Reserve Bank was able to introduce DTIs that it would immediately do so.

That might happen at a later date when it was deemed more necessary.

And the addition of a new tool such as DTIs would give it more flexibility in how it regulates mortgage lending.

So introducing DTIs might allow it to ease up on interest rates or LVRs.

The tools the Reserve Bank uses to protect our banking sector from irrational exuberance are broad and blunt.

Anything that improves its flexibility in managing that process has got to be a good thing.

Like most things in life, it’s good to have choices, even for the Reserve Bank.

While the IMF supported the Reserve Bank’s call to introduce DTIs, it was no surprise that it opposed the Government’s plan to restrict housing sales to overseas buyers.

You would expect the IMF to champion the free flow of goods, people and capital around the world, and to oppose things which restricted that.

But strictly adhering to ideology can bring unwelcome consequences as well as benefits.

In this country those unwelcome consequences include creating a housing sector with major structural imbalances which may take a decade or more to repair.

Of course overseas property investors weren’t solely to blame for setting our housing market alight.

Low interest rates, high levels of net inward migration and a sluggish construction sector had already fired it up when the great outflow of Chinese money started sloshing into property markets around the world.

The Chinese money just added petrol to the flames.

But the New Zealand market was so small and the amount of money flowing out of China was so great that our market was easily overwhelmed.

Although that outflow of capital from China was only one of the factors which caused the New Zealand property market to overheat, its contribution to that process should not be underestimated.

Consider this.

We still have interest rates that are at near record lows, net inward immigration is still running at near record highs and the construction industry is still struggling to lift its output sufficiently.

Yet over the last 18 months the residential property market has rapidly cooled.

While prices remain uncomfortably high, the frenzied buying of two years ago has gone.

Yet the only thing that has changed is that the flood of money coming into the market from investors in China has slowed to a trickle, not because of anything that has been done in this country, but because the Chinese government has staunched the outflow of capital from that country because of the risks it posed to its own economy.

That’s has given us some breathing space.

It would be wise to introduce restrictions on foreign buyers now, because the Chinese money tap could be turned on again at some stage.

And as we have found to our dismay over the last few years, once the local housing market starts being driven by overseas money and gets seriously out of kilter with the needs of its local population, it’s a problem that’s extremely difficult to fix.

So the Government should stick to its guns on restricting overseas investors buying residential property here.

Sorry about that IMF.

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Why talk about Cbinesse money if it had no role in NZ housing market ( As per National, its supporters and people/speculatrs wbo were exploiting at the cost of average Kiwi).

Theg loved to gamble and Casino was their favourate place. Casino management too knew their importance and presence and welcomed them with red carpet.

Natjonal government to recognised their role and helped them to turn entire housing market into a casino for them.

National lost power but still national and its supporters trying to block wht current government is trying to do.

Good to see this article for a change. Accepting reality.


Its becoming obvious now that National was captured by the pro immigration lobby groups.
Australia has got the balls to take a stand against Chinese political donations. Lets see what Labour do....

Hot off the press today:

"China is relaxing limits on outbound investments by wealthy individuals and institutions for the first time in two years, as the country's stable economy and stronger currency give the ruling Communist Party more confidence it has capital outflows under control.

The approval of new quotas to a scheme which allows foreign fund managers to raise money for Chinese investors will be closely watched in Australia, where it could free up billions of dollars in Chinese capital to invest in overseas property."

Read more:

Hi "alittle", before anyone could take your comments seriously - I suggest you re-read your post and perhaps do some spell-check before you submit. Kind of difficult to follow your post when it was littered with wrong typo (Cbinesse, Natjonal) everywhere.


Great article Greg you are bang on!

I could never understand why foreigners would want to buy housing here. Who on earth would buy in a country they do not live in, to rent out to people they don't know and have never met. Odd indeed. Should I buy a house in Saudi Arabia and rent it out and call it an "investment"?

Residential housing historically increases in value at the rate of inflation. In fact the very definition of inflation is largely based on housing prices. That is why I regularly strip the equity of out my house to put to more productive uses such as low cost index funds.

Well if you look around the world this is actually what is happening. "investors" have differing outlooks but if you accept all assets are [hugely] over-priced, likes shares, art etc then where to put your money? then Chinese investors want to get their money out of china into safer jurisdictions where not only is the risk minimalised but they are unlikely to be thorn in jail, or worse.

In terms of "renting out" there is some suggestion that actually houses are empty at the higher end of the market, ie its pure capital gain and /or hiding your money.

NZ's problem is we dont collect such data but the Canadians do and their view / take of their data is enlighening.

"historically" this isnt a histrorical event, this is peak oil and this is a huge paradigm shift that has never happened to us as a species. So you shift your "profit" out of a probable slow train wreck housing where you do have some time to see it coming and hence control and into basically shares and commercial property? good luck with that.

All efforts to try derail the current vovernment

Other day when everyonr was praising Jacinda for her job in her recent visit to EU. TVNZ 3 sports presenter was uncomfortable and was wondering why everyone is prasing her or she is in limelight as she is just doing her job.

Mark was a batsman and should know that if a batsman hit a century everyone claps instead of saying that what is so great about hitting a century as many other batsman has done and is nothing new. By the same logic no one should appreciate anyone winning gold medal for the country as is not the only one.

Fail to understand if he is a sports presenter or National presenter with anti labour venom.


Du Plessis-Allan is clearly just jealous of Aderns success - why else the smear style reporting? Her summation of similarity (to Trump) is so poorly presented it simply comes across as quite pathetic (either in terms of personal qualities or campaign strategy). Tip: stop trying to be the female version of Mike Hosking....


du Plessis-Allan fails to mention the similarity between Trumps lies and the lies of Bill English during the leaders debates while Ardern remained cool and non-combative


The anti-Adern sentiment in Du Plessis-Alans articles is unsurprising given her mum is a top selling Barfoots agent in the glamorous Auckland 'suburb' of Pukekohe. Can't imagine that she can separate her views from that bias completely. Any RE agent would have voted for preservation of the speculative / high turnover market we've had under National and not a stretch to assume their immediate family show the same leanings regardless of any notions of journalistic integrity or impartiality. But hey, she could just be trying to keep up with the Hosk and rest of the right wing Herald crowd. I imagine it's hard to keep your job at NZME any other way. Poor souls....

The anti-Adern sentiment in Du Plessis-Alans articles is unsurprising given her mum is a top selling Barfoots agent in the glamorous Auckland 'suburb' of Pukekohe. Can't imagine that she can separate her views from that bias completely. Any RE agent would have voted for preservation of the speculative / high turnover market we've had under National and not a stretch to assume their immediate family show the same leanings regardless of any notions of journalistic integrity or impartiality. But hey, she could just be trying to keep up with the Hosk and rest of the right wing Herald crowd. I imagine it's hard to keep your job at NZME any other way. Poor souls....


Ok - the picture becomes clearer now. I wondered why Du Plessis-Allan had such a strong bias. This type of reporting is so disconnected from truth that starts to become meaningless. Perhaps our reporters/journo's need to have disclaimers/disclosure statements linked to their articles - similar to what AFA's have when providing financial advice - to avoid innocent/unaware individuals from being mislead.

e.g. Heather Du Plessis-Allan has had a priviledged upbringing in Auckland city. Her family is traditionally National/right-wing voting. Her mother is a real-estate agent and Heather is set to receive a significant inheritance from her parents (from property investment and sales). Any slow down in the property market as a result of regulation might have a significant financial impact on Heather's future wealth so her opinions/reporting should be noted to not be impartial but instead biased upon self interest. (article then begins...)

If this doesn't happen, in time, our reporting is no longer reporting, it's campaigning and trying to sway people for self interest - and what's the point in that? Are our reporters supposed to be reporters or politicians? (sending messages to people in order to promote personal position). There should be no self interest in public reporting - people have the right to freedom of speech, but that freedom is for the individual and they shouldn't be paid for that freedom, unless they're no longer reporters and are infact politicians. Is there a code of conduct for reporting in NZ?


Just read the Law Commission Chapter on ethical reporting.

It makes you wonder at what point these types of articles by the likes of Du Plessis-Allan (or Hosking) would make a case for defamation?

But hey, she could just be trying to keep up with the Hosk and rest of the right wing Herald crowd. I imagine it's hard to keep your job at NZME any other way. Poor souls....

Working in NZ mainstream media is lucrative for some, but ultimately degenerative for your ability to think and likely to be soul destroying.

Du Plessis-Alan was also dumped by her employer. Lets not forget why.

I agree this had me blowing chunks.

hence why I generally ignore the TV stations / news papers, they are fake news outlets. Filled with 3rd rate presenters spewing lies and mis-directions to support their agenda, at least Fox news is entertaining. (PS and I am no labour supporter/voter)


Bringing in a DTI ratio right now would be an excellent idea. To bring it in after the event is useless.
With property prices flattening out, the 2 or 5 yr bright line test is pretty useless now. A case of too little too late. The govt has forgone a huge amount of capital gains tax by its lack of enforcement of the capital gains tax laws and by its introduction of this bright line tax law so late in the property cycle.


Talk to real estate agents off the record and they will tell you horror stories of how our housing market has been used to launder money. It suited a lot of people to keep it quiet and reap the rewards.


Everyone knows but it suited people in power so who cares - Vested interest.

Similarly everyone knows that NO Student is comming to NZ to study but to gain residency. It is a pathway to residency and is even marketed it as such but who cares as gives immediate High to ecenomy but who cares.

In-arguably IMHO we need good quality immigrants with good relevant degrees. So by keeping a graduate here who is NZ degree educated that should be a plus for them and NZ.

Now I am sure it is being abused....


I would like the government to introduce retrospective money laundering checks and freeze property if necessary.

That is what has been done in London and shock horror the volume of overseas purchases has dried up.

I'd give it about ten seconds before somebody called that "racist".


Talk to ex-bankers and they will also tell you how much they were paid in bonuses to sell as much debt as possible at every opportunity when the customer was sitting in front of them for their "annual we care about you" meeting. Then ask how many of those customers were then on-sold credit cards, overdrafts, life insurance, lines of credit, interest only loans and every other financial product that they could not afford! How many of you got suckered into the credit card insurance that no bank ever pays out on? That insurance was designed to add revenue on top of the already high credit card interest and was sold to people that never qualified from the outset. After this sinks in, then ask me how my bonuses were paid! The banks are bleeding you and our economy dry and have been for the past couple of decades. Even the shareholders will lose their shirts once it all comes to a head. Seen what is coming out of The Australian Royal Banking Commission over the past few days? We are only just getting started.

Not a lot is written about the correlation between the NZ and Aussie property markets.

I see the prices there are doing a similar thing to here. Starting to drift down. The once in a lifetime residential property boom is over as global interest rates are picking up. Something a couple of generations aren’t used to.

Penguin looking at the history of property over say the last 50 years do you think this boom is the biggest?its a good question would be interesting to see where this boom sits compared to the others.

Penguin looking at the history of property over say the last 50 years do you think this boom is the biggest?its a good question would be interesting to see where this boom sits compared to the others.

Who defines these "booms"? The media? What if it's all part of a single boom?


Agree agree and agree. Govts job is to protect its citizens including their ability to enjoy home ownership in their own tax jurisdiction. Nats clearly didnt care.

I would add an overseas annual land tax on all existing overseas owned property and anything thats is to legally obscured to work out (change burden of proof to owner). Also fines for agents and lawyers not reporting correct ownership.

I disagree. National chose to protect a subset of citizens who were already in the market and who were positioned to profit from this situation - including their own MPs with an average of 3+ homes.

The fact John Key campaigned on addressing the housing crisis then turned around and denied its existence while this unfolded should demonstrate to young Kiwis that in the end, they didn't matter. Key knew the effect it was having on young Kiwis, as was plain in his campaign speeches.

That the National government then chose to foster and perpetuate conditions that would enrich fewer and older Kiwis while making things harder and harder for young Kiwis suggests it was a government of the boomers, by the boomers, and for the boomers.

I voted for Key (twice) because I respected what he had to say when he was campaigning. It was obviously tremendously disappointing that he accumulated political capital but never spent it on tackling the hard problems he campaigned on.

Not sure that your "disagreement" is really as I agree with you both. National was clearly as morally bankrupt as its leader. However just look at the % they still got this election, arguably they should now be in for the 4th term. Now I am glad they are out, but 45% of voters are clearly happy with supporting the National party which suggests they are also morally bankrupt and un-caring. Then there is the % of Labour voters that only voted Labour because Labour promised to fix things but not raise taxes and pay down debt which is ludicrous given the 9 years of neglect NZ's public services has suffered needs fixing.


Great article, please write a few more like this. I need to buy a house and will be great to have less competition with people believing prices will crash. Can you make it central Auckland specific please :-)

Agree Chessmaster,

If prices can be brought down in Auckland's vibrant inner-city suburbs that would be great!

I'd be in with a grin!


How much would prices need to come down for you to be able to buy in TTP?

Palmy prices id say?

Palmy is the Ponsonby of the Manawatu!

Indeed, there is good buying in Palmy.


Enough to give investors 6% yield. As capital gain is gone according to these articles, only right yield levels will work. The more people sit on the sidelines, the better it is for people like me. Thank goodness, foriegn competition is almost gone. Media will reduce further local competition with their negativity so only the ballsy Kiwis will have opportunities. People still need somewhere to live and rents not going down so good time for savvy investors. It's like Monopoly board game, the ones with the most properties and not the most cash are the winners. No more land being created and new proposed supply is a joke.

Chessmaster in certain market conditions you would be absolutely right. However, during a credit crunch and low or flattening house prices cash can be a beautiful thing. At the present time, with limited capital gains on the horizon in property, at the same time as some fairly poor yields *AND* less favourable legislation and tax treatment incoming, there is a lot of potential upside to being cashed up and liquid. It's probably a small window before conditions change, but if you have limited liquidity over the next year or so, you may find the opportunity cost, very costly in the short term.

Really interesting hearing some of the youngish investor types frequenting open homes next to / near us. They sound really dumb, and indoctrinated into the 'you can't lose with property, mate' brainwashing.

It's a rule of thumb because property is the best investment of all imo. Imagine even contemplating saying you can't lose with shares. Agreed it's not idiotproof and there are prime examples of this but then I don't think that any form of investment is 100 percent guaranteed.

You can certainly swing the game ever more in your favor, by breaking the law and not lodging bonds.. Few thousand bucks accidentally forgotten about every year, no doubt the taxman doesn't see it either.

Take a deep breath and hold. See how long you can hold it. I am no crim like you are trying to make out, give your trolling a rest

"A landlord must lodge the bond with the Bond Centre within 23 working days of payment (section 19). Failure to so was an unlawful act (section 19(2)) for which a penalty (i.e. exemplary damage) of up to $1,000.00 (schedule 1A) could be awarded to the tenant if the landlord did this intentionally, and it was fair to order exemplary damages, having regard to (a) the landlord’s intent in doing the unlawful act, (b) the effect of the unlawful act; (c) the interests of the tenant, and (d) the public interest (section 109(3))."

Hiding that money from the IRD? You're tax evading - a criminal offence.


Residential property investors are really just unskilled leverage jockeys.

They'd never make money in any other arena, so of course are going to vote for a perpetual system that just allows them to borrow shitloads and watch the assets appreciate - then rinse and repeat on existing profits. It's the gravy train that keeps on giving.

... supplying a need nonetheless. There are more renters now than there has been for a while but there was always a large portion of households as rentals since time immemorial. If you don't like the fact that there are people getting a recompense which really isn't excessive for risking their capital and providing housing then maybe you could relocate to communist China where all land is leasehold to the state.

When you even out the highs and lows of capital gains it is probably in the single digits return longterm. The problem is that even 5 percent increase on 600k is still more than most can save over the same timeframe.

Like I said...leverage jockeys. Let's see you make the same gains without massive borrowing and recycling of equity.

Chessmaster - 'It's like Monopoly board game, the ones with the most properties and not the most cash are the winners'......

It's funny how people keep comparing this real world market to monopoly and fail to see the big picture outcome....Not sure how monopoly usually works out when you've played it, but generally speaking in my experience it never works out well - if you win, you are seriously resented by other people. One side decides to stop playing and the game breaksdown - people resort to cheating and lying and relationships fail.

When last I played with my wife and her girlfriends, increasingly advanced fiscal concepts such as debt, futures trading, interest and finally a debt celling were introduced. The game ended in a monopoly controlling all the hotels and a majority of the houses. Landing on unimproved or poorly improved property was like a vacation!!! Maybe you need better players to have a better game Observer?

Hi Chessmaster, as well as ballsy investors are others who have been waiting on the sidelines for too long waiting for a price drop which isn't occurring. There is no crisis here to cause a price drop.

So you can predict the future? Wow....super impressive!

Repeat "there is no crisis ...." right now.

Though there are plenty on this website trying to manufacture one

But you can't say with 100% certainty that there won't be one in 6 months time can you? So where does the confidence come from in your statement that there is no crisis, because one could start at anytime?

The best anology I can think of right now is a 60 year old that hasn't look after their health or well-being and claims with 100% confidence that they'll never have a stroke or heart attack - when history would suggest if you behave in a certain way then your chances of such an event occuring increase a lot. We've behaved in a manner that makes us high vulnerable to a housing shock - yet many don't want to acknowledge that fact. Fine if you don't, but your perhaps living in lala land...and not willing to acknowledge all the risk profile.

Most people, dgms excluded, are happy with how the future looks. Including the famed Retired Poppy has said and repeated in posts that he no longer expects a property crash. Anyway where is the retired poppy he has been noticeably absent of late?

What people think is meaningless Houseworks....unless of course thoughts determine reality/events.....and what the future looks like (which is you internally trying project the future from inside your own brain) is crystal balling which again is meaningless...or perhaps you're a magician and you think the housing market is going to be stable forever so you pray and pray and pray and then look, I was right, the housing market was stable....(but then that would be simply your brain tricking yourself via confirmation bias with a poor understanding of the causes and effects at play in the market)....just saying...

Have you read any of Nassim Talebs books?

Hi Houseworks,

Certainly, there are many people on this site who have made their biases clear in the past: they would love to see a housing market crash from the perspective of their own self-interest.

I happen to be one such person: I'd love to purchase a house for a song in one of Auckland's inner-city suburbs....... But I don't believe that's at all likely - and never have. )-; (I've always made that clear.)

And you are right, there are certain people on this site who have watered down their expectations of a crash in the recent past. As you note, Retired-Poppy is an obvious case.

Indeed, there is evidence that the DGM's are fracturing as a group: their numbers are now diminishing quite rapidly.


Houseworks, TTP, a challenge, it's a tough one - ok, here goes. Can you make a contribution that's intelligent & thought provoking. You have the rest of your lives to consider this. Can you do it?

Ha-ha-ha-ha :) "the famed Retired Poppy" Love it!

Somewhere with a beachfront would suit me nicely I can't afford them at current prices. Was looking at Michael Boulgaris home listing asking 8.8 in remuera and thinking that must be an acre or two of land for that price however when I got to the land size I found the home was sitting on just over quarter acre. Very nice home don't get me wrong.

Yes i wonder where the retired poppy is, I know that he hasn't popped his cloggs yet. My pick is he has decided he can't wait any longer and he has been spending his time attending weekend open homes.

for those who are not aware, Houseworks joyfully admitted withholding tenants money he was not entitled too here;

You should know better than to indulge in his sort of thing. You have no right to hold onto this money, it is nothing short of deceitful. It's ironic you're first to bluster how you provide an essential public service too!!!!

Yes, a DTI tool used earlier on might have prevented a lot of rogue speculator/Landlords infiltrating what otherwise would have been a more level playing ground. Sadly, here we are, living with a teetering and precarious housing market thats too big to let fail. Three Government terms with this mindset have greatly increased the chances it now will.

Where's the actual quote? From what I read you have been caught with your pants down and (w)rong again

PS silent w in brackets just for RP, it has special meaning for him.

now-now:), not wrong. This just demonstrates your novice approach to communication, finances and Landlording. Do less that is awful, do more what is lawful. Cutting corners will land you in hot water, that's if you're not already.....

Again, if your rates bill is too high then do what this guy did. Become the Mayor of Hamilton, and introduce a law to reduce it!;

Anyway, go ahead, have the last venomous word, it's your thing ;-)

Not venomous rp just giving you a little friendly tickle to entice you out from early winter hibernation ;) And you yourself did request a thought provoking contribution, did you not :) Have a good afternoon

Houseworks, the quote about you failing to lodge your bonds is right here, so don't try to wriggle out of it (

by Houseworks | Wed, 04/04/2018 - 20:21

Sometimes don't even get my bonds lodged which I realise is a huge no no although I know I'm not alone in this transgression. It can be expensive if pinged touch wood.

I absolutely agree with you. There is no crisis. Just media trying to manufacture one and the average Joe will believe it. Interest rates are going nowhere anytime soon, it's all scaremongering. No media will every say house prices are going to go up. Been investing for more than 20 years, all drops are temporary and bounces back to higher. Been hearing all this time that prices will drop, world will end, we will lose our jobs, etc, etc. US is a terrible example for housing, we can't leave the keys back with the bank and the family home is last to go. Even with the new taxes, who cares!!! You gotta make that money or gain first to pay the tax, people keep forgetting that. Do nothing and no extra money.

Which markets have you been investing in Chessmaster for the last 20 years?

Unfortunately stopped Auckland about 4 years ago, Duh!!!!!

Agree on the first and mostly with the second. Why not adopt a foreign buyer regulation like Melbourne. Foreigners can’t buy existing homes but can purchase off the plan/new builds. This would help increase new stock which would then be added to the rental market. The good parts of foreign investment without most of the negatives.

You ask "why not limit overseas buyers to new builds"

Answer - too logical - too simple - the twerps in Wellington like complexity - the knowledge and recommendations have been around for at least the last 5 years. National were never going to do it. Labour are coming under great pressure from the pressure groups to do nothing - seems like the pressure groups, the financial establishment, the big-end-of-town types are prevailing at the moment

Meet the establishment!
not the Fockers,
the Establishment.

If one thing is becoming clear from the royal commission it is that our financial institutions see themselves as beyond the law.
Lying to the regulator, failing to invest money into the proper compliance systems, delaying breach reports to the regulator, charging fees for ongoing services to dead people and covering up wrongdoing are just a few of the grubby antics on show.

What value an Australian CV, or Australian education.

More popcorn!
It will take a little more than sandpaper to smooth this one over.

Yes, banks in the US are totally corrupt and it seems the Aussies ones are too. And the government in cahoots with them.

Haha yes I forgot about that pesky thing called government. Unfortunately it seems labour and national both seem too driven by ideology and vested interests!

The latest Australian census had 200,000 empty homes in Melbourne and Sydney. That's the result of letting foreign buyers build new. Labour's policy of making them sell is far better.

Hi Doris, agree that is an issue but not a major one remembering that Melbourne alone has nearly the population of NZ. I still think it would easily have net benefit even with ghost houses.

Incorrect - it is the State of Victoria that has a similar population as NZ

Hi Doris,

You need to remember that in the greater Melbourne and Sydney areas combined, there are around 10,000,000 people.

Thus, while 200,000 empty homes might seem a large number, it is not extraordinarily so.


Cheap money is the number one factor why housing prices have gone through the roof ! The Federal reserve bank of America can no longer manipulate these interest rates to stay this low, and up they shall go. Higher interest rates will bring the fall to the property market very soon, I predict a 50% or more crash in home prices. Forget about our Government trying to save the day, the pump and dump agenda designed by the powers that be can control all this by simply raising interest rates from the Federal Reserve Bank of America. Sorry Greg if this simplifies things to much and gets people away from arguing over New Zealand politics etc. It seems to me Greg you need to keep the left and right fighting to keep your website alive ! And yes I did use the word Crash.

Hi Auckland,

You write, "......I predict a 50% or more crash in home prices."

You'll be waiting for a very long time, my friend......... Suggest you invest in a rocking chair, a comfy dressing gown and a pair of lambswool slippers.

But, to be honest, you'd be better off investing in a property.


TTP is suggesting Auckland City will support the entire global economy in the event of an overseas policy misstep, totally laughable!

You ARE clueless. Okay-okay - argh-hmmm (now I'm struggling to keep straight face here), when Auckland house prices do collapse and presuming your theory is indeed sound, Palmerston North will come to the rescue - right?

Hi Worn-Out Poppy,

Can you tell us where I said, "Auckland City will support the entire global economy in the event of an overseas policy misstep"?????

There's no point making things up as you go along, Old-Poppy........ People soon see through you.


oh and you also said that you imagined Wellington house price strength would also push up Auckland. Where on earth are you getting this bile from? Any more delicious TTP style theories? I imagine you must be cracking up when you are typing some of this stuff :)

Anyway, enjoy your week.

Hi Expired-Poppy,

It's not impossible at all that an increase in prices in one market (e.g. Auckland) will impact on prices in a related/neighbouring market (e.g. Wellington) - or vice versa.

Such effects have been noted on many occasions by market analysts - in pretty well all western economies.


TTP, when you and others resort to name calling, it confirms the deep down belief that commentators crash theories are soundly based. Feelings of insecurity and wishing such feelings would go away is entirely understandable.

I am curious why people are so concerned about what people invest in - housing, shares, bonds, gold, bitcoin - I don't think it really matters. But as I've said before if someone is pushing one over another then I suspect they are trying to sell you something.

This is coming to a city near you....

Chinese interests in the Pacific are far from benign. They have been using 'soft power' to gain a stranglehold. The west has been asleep at the wheel. Not sure where this will end.

I used to think like this too until I read this book:

The author outlines all the crappy things the US have done to the Pacific. Bikini atoll being the most serious I guess.

Auckland, anyone predicting 50% price drops should be seen to be analysed!
There used to be people on here that predicted 40% drops and they are still wiping the egg off their faces.
Look prices in Auckland are expebsive we all know that, but while there are people wanting to live there prices will not drop in the medium term.
If you can afford to buy a rental with a good return then I suggest you should be looking at it

TM2, you are naive to think NZ will not fall victim to an overseas policy error. If we do, yes, NZ house prices could easily fall 40-50% or even 60% over a period of several years. These are incredibly dangerous times. When the jobs run out then so will the people. All those jobs generated by this housing ponzi - gone-gone-gone!

In my view, Commentator - Auckland's theories are very plausible.

There is a world outside Christchurch you know - right?

Hi Stroppy-Poppy,

Please note that there have been numerous "overseas policy errors" made over the past five years......... But NZ house prices have not dropped over that time period.

Stuff-ups overseas can easily lead to NZ becoming a more attractive place to reside........ and that's exactly what's been happening.


Yes but it's also naive / misguided to think Auckland property prices CAN'T crash due to an offshore 'event'.
I don't forsee a 40-50% drop. But I can definitely foresee a 20-25% drop, although my central view is a drop from peak of 5-10% followed by several stagnant years.
A financial crisis could be a trigger for a 20-25% drop

Hi Fritz,

Nothing's impossible - but inevitably there are scenarios that are far-fetched..........

I can certainly see Auckland property prices rising 25% in the future......... however, a 25% drop in prices seems far less likely - but certainly a tempting thought for the masses (including me!) who would love to purchase a house in Auckland. (I suppose a little hope and wishful thinking is not a bad thing!)


TTP I predict Remuera house prices to drop 50% over the next 2 months LOL!!

DGZ, you also predicted Jacinda & Clarke were destined for Landlording and TTP foolishly believed you - lol!.

TTP, you could for once actually be correct! Sometime over the next 100 years, Auckland house prices WILL rise 25%. So there you have it, a TTP prediction that will most likely come true.

I have to be honest here, your theories are comical, shallow and far fetched. It must be challenging being an individual that struggles making any plausible contribution in the absence of financial literacy. Your projections are nothing better than unstable guesswork.

hmmm, I think a drop of 20-25% is not far fetched. 40-50% - yes.
But plenty of countries have had falls of 20-25%.
Income to price ratios are severe, and a whole lot of policy changes are looming that are negative for house price growth.
I'd say:
Drop from peak of 5-10%: 45% likely
Drop from peak of 0-5%: 30% likely
Drop from peak of 15-25% - 15% likely
Drop from peak of 25% plus - 10% likely

...entirely plausible and certainly less damaging than a 50-60% drop thats for sure. Nothing can be ruled out just like once the printing of money on a Global scale was also once seen as inconceivable.

Hi Dishonourable-Poppy,

Where above did I mention "the next 100 years" - or any specific timeframe???


exactly. No time frame, just another "headless" TTP prediction. Nothing of value and personal commitment. Its like saying sometime in the future we will have a change of Prime Minister.


Hi Dishonourable-Poppy,

Advice for you: When you're in a hole, stop digging.


ha-ha-ha, you told gingerninja to stop digging too. Next said how much you respected her comments. I think deep down you must respect my comments too - nice ;-)

(Reti) Red Poppy is the proverbial angry bear emerging infuriated after having his hibernation disturbed :)

Houseworks Diary note "first thing Monday I have to ring Tenancy Services and fess up to my dodgy dealings" All bonds must be lodged, its the LAW!

Houseworks does indeed need to do some basic essential housekeeping......

That moniker is quite witty with the word play. Well done.

Oh here we go. Another untaught individual itching to unleash another "Taxinda" comment. What's wrong Ex Expat, TradeMe forums down?

Yawn - I'm so outa here - lol!

No, I had my entree and main there reading between the lines on the “Gayford Rumours” thread. Thought I’d come over here to see what’s for dessert. Looks like you have been busy. That’s a day out of your life you will never get back.

Let's face it - no one knows just how many residential properties (or urban commercial for that matter) are owned by foreign interests, not resident in NZ, simply because no Government has asked the question.

There is ample anecdotal evidence of vacant properties in AK, as well as some commentary that it is too hard to dig in to the records to determine who the true owner is. But shouldn't this question be asked to give a true and substantial answer to the question, rather than just relying on the opinions of people? It doesn't matter how big their wallet and/or ego is, having an opinion doesn't make them right unless they are prepared to substantiate it.

I like you a lot already.


Our housing moved from being an investor market to speculation some time ago. Defusing that is going to take a number of measures and pushing back against money looking for speculative gain (overseas or local) as opposed to long-term investors is an important objective - but the set of changes needed have to be designed to not lock owner-occupiers either out of the market or in to gigantic mortgages. Beyond the potential for real damage to New Zealand if the market suddenly tanks because of events outside NZ (and it might), there's the damage property speculation does to society and the productive economy. That well-funded special interest groups screaming bloody murder against attempts to manage and reform the broken market that benefits them is to be expected - but why do we bother to listen?

Like many I am from a privileged central Auckland upbringing and went to the best school and Uni and will inherit a large amount of property also bl bla bla, but it does not change any of my moral and rational beliefs that Auckland and NZ for that matter is being absolutely destroyed by Government policies that have created horrendous mass inequality and the NZ society that I grew up in is being quickly eroded. The likes of Heather Du-Plesis would rather drive around in Range Rover than preserve things that money cant buy.

Pressure building will now start from vested interest to delay or dilute the ban as cannot be avoided.

Winston Peter should be able to see through and aling with Labour be firm as is their flagship promise to the people of NZ.

Aloha IMF, have you made the same call to China to remove their foreign buyer ban?

Why be unduly worried when the only available figure of foreign buyers i.e frm National, is a puny 3% ????What's propelling your special "concern" for NZ?