NZ Housing boom over?

[LFC]

Well I am reading more and more articles and sales stats are showing now that the housing market is now entering a downward cycle.

Be a good time to buy in 3-4 months I reckon, anyone else got views on this?

http://www.nzherald.co.nz/category/s...ectid=10491505

http://www.stuff.co.nz/4390549a13.html

[MrTTTT]

buy property in lagos

[Markh]

Originally Posted by LFC

anyone else got views on this?

Population is growing.
Overall trend is increasing demand.
Limited amount of land.
Overall trend is very limited increase in supply (most increase would be from further away from the city).

Therefore any drop in housing prices in Auckland is likely to be temporary - overall the prices will rise.

Will housing be cheaper in 3-4 months than now? Maybe.

[OY636]

The average January sale was for $517,613 compared with the December average of $559,803. Prices are still well ahead of last January's average of $475,461.

A slow in the increase does not mean the market has collapsed. All those people waiting for the housing market to crash will still be waiting, the increase is just slowing. But it is still increasing.

So what Markh said

[shootme]

a dip in prices so now rents go up

[StN]

Tell this to the 1000's of people that have to settle on titles out at Pegasustown...

[DrTiTus]

My rent hasn't gone up in ages, *takes advantage of underpriced living*

*and also touches wood*

*not that wood*

[pk_wasp]

NZ Housing boom will continue for much longer because:

Those generous tax breaks.
Economy hasn't tanked yet.
Housing NZ guaranteed rents for property investors.
Mortgages are still easily serviceable.
No capital gain tax etc.
Everyone in NZ is a property expert and loves investing it

Sales are still going strong, prices are still high..NZ media is just bored. We need a really big economic shock to see prices coming down..

[Sp0nge]

Originally Posted by LFC

Be a good time to buy in 3-4 months I reckon, anyone else got views on this?

long term, property will go up. of that there is no question.

sure some months there will be less sales, or the average sale price will be lower, but you cant always take that as a guide of the overall market.
what was the weather like? how many real expensive houses were sold? etc
it doesnt take too much to affect stats ...

sure there is a small slowdown currently...houses may be taking 10 days longer to sell...but from what i can see they are still more expensive than a year ago.

if you are thinking about buying a house, there is no time like the present.
whenever that may be.

it is best to ignore the media.
a year ago they were predicting a slowdown...and also countless times in the last few decades...but houses were only $50k then, lol

if you were thinking about buying a house 4 months ago and didnt, do you regret it now because you have to pay more?
if you are thinking about buying now, do you not think you'll regret it in 4 months if you dont?

trends are more likely to continue than to change.
and houses are more expensive now than they were a year ago.
thats all you need to consider.
imho.

[Ard Righ]

Change of Government could bring a change in policy in freeing up new land for new housing developments. If that happens, the prices will be affected.

Housing affordability in NZ will be an election issue.

[chubby]

^^ and do you believe the nats will do anything that will negatively affect the value of our more affluent citizens property portfolios?

[Ard Righ]

Originally Posted by chubby

^^ and do you believe the nats will do anything that will negatively affect the value of our more affluent citizens property portfolios?

National will do what it takes to get into Government. Just like Labour will do to stay there. That's politics.

The 'wealthy' property investors are in the minority. The majority of people in NZ either dont own a home, or cant afford the mortgage payments to get into one.

They outweigh those who made the fat profits on the housing market going up, along side the interest rates.

[caffiend]

Originally Posted by pk_wasp

Mortgages are still easily serviceable

Remove the 'easily' part and you'd be correct.

[Biggus]

I think you'll see more mortgagee sales and a correction on overvalued houses, perhaps a mild overall correction, but that's about it unless there's a major global issue.

About time we lost our "one of the highest interest rates in the world" claim to fame though :/

[chubby]

Originally Posted by Ard Righ

National will do what it takes to get into Government. Just like Labour will do to stay there. That's politics.

The 'wealthy' property investors are in the minority. The majority of people in NZ either dont own a home, or cant afford the mortgage payments to get into one.

They outweigh those who made the fat profits on the housing market going up, along side the interest rates.

you seem to think that 'best for most' is a concern for the torys.
the top 20% have always been nationals focus, always will be. screw the poor (or only average).

[{m}]

Prices can't go up forever, anyone who thinks that isn't thinking very hard.

And also anyone who'd looked at the sharemarket in the last couple of months will know that the whole world is heading downwards right now.

[LFC]

Interesting comments so far, seems most think that prices will remain stable.

I partially agree with that sentiment, I don't see property prices crashing but I do see a correction in prices downward slightly.

Personally we are looking at properties on the North Shore in Auckland, Torbay, Browns Bay, Albany(as my partners family live around there) and its pretty hard to find anything decent for under 450-500k, we have around 50k deposit.

We are both on reasonable incomes but would be cutting it too tight trying to service a 400k mortgage at the current interest rates, pretty sure alot of other people out there are in the same situation!

[fixed_truth]

Originally Posted by Ard Righ

freeing up new land for new housing developments. If that happens, the prices will be affected

imo loosening resource management regulations will only mean that there will be more houses available to willing investors, as returns are too good to allow supply to beat demand. i reckon the only way to make ground on housing affordability is a capital gains tax (like many other countries) - remove the speculative demand by making property investment comparatively unprofitable - banks stop the property inflating practice of loaning on equity - eventually a house becomes a home again

[Heyzoos]

Originally Posted by Biggus

there's a major global issue.

You mean like the Subprime mortgage crisis.

[Jodi]

Well, my thinking on the housing crisis is that it has two causes:

1) The "buy now, pay later" generation's inability to save a deposit of 20%. Or to save at all. They spend most of their time buying crap they don't need and then paying it, and its interest off. Come to buy a house, and they just won't be able to pay the interest payments cos they are aiming for a 90-100% mortgage. Oh, and of couse they want to buy their 3rd home straight away. Sorry fellas, buy the crappy 1 bedroom shithouse and sit on it for a couple of years pay off the mortgage as best you can so you have enough equity to get the 2nd house which is better, repeat until you actually have the house you want.

2) Baby boomers not selling their house, but instead buying a 2nd or 3rd house as rentals or property investment to supplement their retirement. They have been freehold for ages, and banks are falling over themselves to lend to these low risk people. This has the unfortunate effect of raising house prices so that first time buyers just can't affored a decent house at all.

I don't believe that interest rates are going to drop for the next 3 or so years, and because of that more people will be hitting hard times when refixing their mortgage or trying to afford a house. Therefore the market will slow then stagnate in the immediate future until interest rates will drop.

However this will only really happen when a resession comes along, so that means even more people will not be able to afford house payments, so the market will still be subdued even as interest rates are dropping. Only once the economy starts picking up after the resession will house prices start rising again. I reckon this will be in 7-12 years time.

[Evilmonkey]

Growth is dropping prices are not so much. In Hamilton prices have been increasing by constantly, even though the amount of increase is slowing.

[Biggus]

Originally Posted by Heyzoos

You mean like the Subprime mortgage crisis.

I don't know enough about it to make that call, it will be interesting to see how it pans out now that Bush has forced interest rates down.

[OY636]

Jodi you for got the Kiwi saver plan, So now if you are about to buy your first home you can use your kiwi saver scheme. So all those people that can't save and can't get a house. Now can. Demand is greater than supply so house prices go up again.

[BF Jax]

I've been bitted by a house price crash before (London in late 80's / early 90's), bought a flat for 64k ukp, had to sell it at 50k 4 years later. Today that flat is worth around 200k. When interest rates go above 15% I'll worry about a crash in the prices here, until then the rate of increase may slow, but prices are going to keep going up and up ihmo.

[Ard Righ]

Originally Posted by fixed_truth

imo loosening resource management regulations will only mean that there will be more houses available to willing investors, as returns are too good to allow supply to beat demand. i reckon the only way to make ground on housing affordability is a capital gains tax (like many other countries) - remove the speculative demand by making property investment comparatively unprofitable - banks stop the property inflating practice of loaning on equity - eventually a house becomes a home again

Capital gains tax has pros and cons. Would require a better alternative to get people to accept it. But it needs to be something considered by the Government, if they want to slow the economy while keeping inflation within it's accepted range.

[Sp0nge]

Originally Posted by BF Jax

...the rate of increase may slow, but prices are going to keep going up and up ihmo.

thats exactly what is happening here in welly.

http://www.nbr.co.nz/home/column_art...cname=Property

in january "Wellington price growth slipped to 10.6 percent from 11.4 percent" in december

10.6% is still phenomenal growth per year...whichever way you look at it.

[smeggar]

Originally Posted by Sp0nge

thats exactly what is happening here in welly.

http://www.nbr.co.nz/home/column_art...cname=Property

in january "Wellington price growth slipped to 10.6 percent from 11.4 percent" in december

10.6% is still phenomenal growth per year...whichever way you look at it.

It all depends on what data you look at...

Nat Banks monthly property focus:
http://www.nbnz.co.nz/economics/publ...ocus_Jan08.pdf

Page 11 has stats based on REINZ data and they show Wgtn house prices grew approx 1.4 % in the previous 12 months. Slightly less then QV's figures. And of course taking into account inflation of ~2.5% (yeah right inflation only 2.5%!! thats another thread right there) and house prices have depreciated in real terms in the last 12 months in Wgtn, based on REINZ data.

[Sp0nge]

youre right stats can be used to show almost anything
but 1.4% does not sound right to me personally.

our GV went up 18% from september 2006 to sept 2007.
i expect something in the range of 8% to 12% by the time sept 2008 comes around.

i also keep an eye on the "property press", and although houses do seem to stay advertised a bit longer, the prices seem higher by more than 1.4% from a year ago.

[Biff]

SELL!!!!!!!SELL!!!!!!!!!SELL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[pk_wasp]

Originally Posted by BF Jax

When interest rates go above 15% I'll worry about a crash in the prices here, until then the rate of increase may slow

so true, 10% interest at the moment is pretty easy serviceable, I don't NZ interest rates will rise further, so the property boom will continue unless we get a real local economic shock.

[junbeck]

Originally Posted by Ard Righ

Capital gains tax has pros and cons. Would require a better alternative to get people to accept it. But it needs to be something considered by the Government, if they want to slow the economy while keeping inflation within it's accepted range.

And that will never happen as many many MP's own 2nd homes and rental properties.

Will be interesting to hear what Clarky has to say in her speech to parliament today, more land for housing. Absolute zip about gains tax being implemented.

[markE]

http://www.stuff.co.nz/blogs/showmet...ng-dont-panic/ Good article from Bernard Hickey

[Sp0nge]

lol @ scare mongering article

frankly i cant see prices dropping by 30%...but the article suggests houses are 30% overvalued.

actually, i cant even see the overall market dropping by even 10%...although some individual houses obviously do.

[Omegakai]

Originally Posted by Sp0nge

lol @ scare mongering article

frankly i cant see prices dropping by 30%...but the article suggests houses are 30% overvalued.

actually, i cant even see the overall market dropping by even 10%...although some individual houses obviously do.

its not the first article to suggest over inflated housing. either it is over if inflated, or it was under valued hence the steep rise in housing over the last few years.

[Whiplash]

A lot of houses in auckland are embarrassingly overpriced.

[Torka]

Originally Posted by Whiplash

A lot of houses in auckland are embarrassingly overpriced.

Are they tending to sell at those prices?

I'm just curious about whether they're actually going at the insane prices or if it's just greedy owners who've been lied to by their agents, thinking if they wait they'll eventually find a stupid enough buyer.

[Gentl e]

Government to the rescue [nzherald.co.nz]

[Juju]

They have been trialling, or talking about a trial for this in Queenstown for years now? So I guess this 'announcment' is just to say it will be for the whole country now.

[Sp0nge]

Originally Posted by Omegakai

its not the first article to suggest over inflated housing. either it is over if inflated, or it was under valued hence the steep rise in housing over the last few years.

does it have to be either or?

is the wind either a hurricane or perfect calm?
is the ocean either high tide or low tide?

perhaps the current state of things is just where things are supposed to be?
and perhaps in the last few years nothing was out of balance either?

reality doesnt necessarily have to be either or.

[Sgt Seb]

hmm you sound like purple-kush