As any developer will know, banks across New Zealand have dropped a couple of belt sizes in the recent years. They’ve moved rapidly from the binge eating of the 5 or so years between 2011 and 2016 straight onto the no-sugar diet. Let’s just hope it doesn’t lead to a sugar crash!
When prices are going up, everyone seems happy to pay ever increasing prices and nobody questions whether or not it is a good time to buy. Conversely, when prices are falling everyone sits on the fence waiting for the market to pick up.
I’ve recently written a blog post on how to buy in a soft market. This one is the opposite, for those of you selling. Let's talk agents, strategy and tactics to get you the best outcome.
When it comes to property, the risk is that borrowers (and speculators in particular) think tomorrow will be better than today and don’t act. Watching a speculator in action is like putting a frog in water and gradually increasing the temperature. The frog never jumps out.
Housing markets typically move in cycles – often referenced as the ‘property clock.’ Anyone with an interest in property sits around guessing what time it is. If you observed the clock over the past thirty years, it has largely worked out, but right now reading the property clock is getting harder.
Sydney has had a decline of 9.50% in property prices since they peaked in July last year, and Melbourne is not far behind with a drop of 5.80%. Technically anything more than 5% is considered a crash, so are Australian house prices really crashing and should we be worried in New Zealand?
Time to cut through the noise, try and make sense of what’s going on in the world, and explore what could happen with house prices and mortgage rates in 2019.
The Auckland market is in a state of flux. So, what is some of the data telling us about house prices?
It would be very easy to rationalise that the foreign buyer ban will have an impact on house prices. My view is that it won’t in isolation of other changes. But there has been progressively a large number of changes that will significantly reduce foreign investment into NZ property.
It’s convenient and lazy to show that for the past thirty years house prices have doubled every ten years, and even worse to extrapolate it out into the future. For those of you that like a few numbers, strap in as you’re about to exercise your brain, but I promise it’s worthwhile.
I get asked daily what’s happening with interest rates. To answer this question, it’s useful to first define what may affect interest rates. The major influence on interest rates is inflation. As inflation rises, interest rates rise to curb inflation (spending). As inflation falls, interest rates fall to spur spending and economic growth.
For those of you who have read my recent article Top 5 first home buyer tips, you may remember me talking about the opportunities that have presented themselves over the last year or so to potential first home buyers. Where there’s a will there’s a way, as they say, and that certainly seems to be the case with the current New Zealand property market.