Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

New Zealand Housing Market Begins To Reverse

Recommended Posts

http://www.stuff.co.nz/stuff/0,2106,3601841a11,00.html

House price growth knocked by migration fall, interest rates

13 March 2006

By SUE ALLEN

Fewer new migrants needing homes and rising interest rates mean the chickens may have come home to roost for the slowing housing market, the country's valuations agency says.
Quotable Value figures for February showed property prices grew 15.3 per cent in February, down from 16.8 per cent in January. Overall, house price growth was easing off in most areas, spokesman Blue Hancock said.
Rapidly rising house prices have been one of the biggest drivers of the New Zealand economy as people have borrowed against their homes to invest in new cars, boats and other big ticket items. In turn, that has fuelled inflation.

The IMF were correct when they stated that the housing bubbles that had formed worldwide would deflate together. Ireland appears to be the last link in the HPI chain?

Share this post


Link to post
Share on other sites

http://www.stuff.co.nz/stuff/0,2106,3601841a11,00.html

House price growth knocked by migration fall, interest rates

13 March 2006

By SUE ALLEN

Fewer new migrants needing homes and rising interest rates mean the chickens may have come home to roost for the slowing housing market, the country's valuations agency says.
UK = more inward migration and falling interest rates.
So NZ is pretty much 180 degrees opposite the UK in economic as well as geographic terms then. Thanks for stating the B Obvious.

Share this post


Link to post
Share on other sites

[Quotable Value figures for February showed property prices grew 15.3 per cent in February, down from 16.8 per cent in January. Overall, house price growth was easing off in most areas, spokesman Blue Hancock said.

"figures for February showed property prices grew 15.3 per cent in February"

UP 15.3% ! Not really a 'crash' though ? Anyway, I'm there next week for a look round- will let you know the position in April :)

Share this post


Link to post
Share on other sites
Guest Winners and Losers

UK = more inward migration and falling interest rates.

So NZ is pretty much 180 degrees opposite the UK in economic as well as geographic terms then. Thanks for stating the B Obvious.

Funny then how quickly things have changed in NZ. A few weeks ago the media was saying 'no crash for NZ', 'no falling prices for NZ'.

Australia = more inward migration and falling interest rates????? Why are prices falling in Oz then? Could it be because property is OVER VALUED.

Share this post


Link to post
Share on other sites

UK = more inward migration and falling interest rates.

So NZ is pretty much 180 degrees opposite the UK in economic as well as geographic terms then. Thanks for stating the B Obvious.

Falling IR? :unsure:

B o E was on hold at their last meeting.

US, EU, Japan all headed up which suggests rates in the UK cannot do the opposite. Sterling at 1.7248 this morning reflecting lower UK rates.

Share this post


Link to post
Share on other sites

Falling IR? :unsure:

B o E was on hold at their last meeting.

US, EU, Japan all headed up which suggests rates in the UK cannot do the opposite. Sterling at 1.7248 this morning reflecting lower UK rates.

UK rates will be down in April continuing the downward trend - the markets have alreadfy factored this in.

Share this post


Link to post
Share on other sites

UK rates will be down in April continuing the downward trend - the markets have alreadfy factored this in.

I hope you haven't got money riding on that.

http://www.bloomberg.com/apps/news?pid=100...VOZcS4&refer=uk

The bank kept its benchmark interest rate at 4.5 percent on March 9 for a seventh month and investors. The pick-up in output prices this year reinforced expectations borrowing cost will remain on hold through the rest of the year. The yield on the interest-rate future maturing in December was at 4.76 percent at 09:35 a.m. in London, a gain of 0.29 percentage point this year.

Share this post


Link to post
Share on other sites
Guest Winners and Losers

However there are key differences with the UK economy.

And these are?

Share this post


Link to post
Share on other sites

And these are?

Need I say? Mass immigration.

However, what most people don't know is that the New Zealand Central Bank was the very first bank to adopt an inflation target at 2% in 1989.

http://www.rbnz.govt.nz/speeches/2361827.html

Since that time, credit has flooded the economy. Yet because the labour market has been deregulated, inflation (wages) didn't respond. However, the huge surge in credit when interest rates dropped in 2000, did have an effect on both the labour market and housing market.

Unlike the past when interest rates would normally have been used for many reasons, to force a correction in an adverse trade balance, or a pre-election boom and bust cycle, the inflation target was meant to deliver a stable envrioment, and in doing so, make economic desisions more stable. However, when interest rates where lowered and a wave of credit washed over the economy, houseprices spiralled, and the economy went to junk.

Inflation targetting is being abandoned as a policy tool, and alternative ways of choking off credit are being looked at.

Share this post


Link to post
Share on other sites
Guest Winners and Losers

Need I say? Mass immigration.

Well, excuse me for asking.

Share this post


Link to post
Share on other sites

The NZ currency is very over-valued too. Little point investing in property at the moment because you're being robbed blind. I think loads of money poured in because of the relatively good interest rates.

It's economy doesn't really do too much: timber, agriculture and tourism. They reckon they'll avoid recession! No chance.

Share this post


Link to post
Share on other sites

Unlike the past when interest rates would normally have been used for many reasons, to force a correction in an adverse trade balance, or a pre-election boom and bust cycle, the inflation target was meant to deliver a stable envrioment, and in doing so, make economic desisions more stable. However, when interest rates where lowered and a wave of credit washed over the economy, houseprices spiralled, and the economy went to junk.

Yes, a pathetic way to run an economy. From your thread I see they are now talking about credits controls, meanwhile being involved with a major bank that is dishing out 100% debt. Go figure if there is a working briancell amongst the lot of them.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 339 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.