Do we have any evidence in hand of the impact on the residential real estate market yet of the recent round of fixed mortgage rate increases undertaken by banks? Yes, we do.
My monthly survey has shown a decrease in the net proportion of these investors thinking about buying another property from 10% down to only 2%.
I saw a newspaper headline recently along the lines that house prices have now bottomed out because some banks have cut their two year fixed mortgage interest rates. But interest rates aren't the only factor causing house prices to go down.
Between all the news of increasing interest rates and falling house prices, it's an intimidating market to be in right now. But what aren't the headlines telling us?
When will house prices stop falling? No-one knows. But it looks like we are quite a long way off the bottom being reached for a number of reasons.
Development companies have been recently finding that client enquiries are falling away. People can see prices falling so will naturally feel the longer they wait perhaps the cheaper the construction cost will be.
Almost three and a half months have now passed since the March 23 announcement of some radical changes in tax rules for investors in residential property. The expectation has been that investors will sell up in disgust, but there's no statistical evidence of a flood of properties hitting the market.
I continue to hear stories about investors selling off their properties in disgust at the government’s proposed tax changes. But are investors about to bail out of the market?
The cult of personality is alive and well in the New Zealand property market with the next wave of self-styled property gurus. Now they're digital savvy and on social media.
We all know that the residential real estate markets all around New Zealand have been rampant since just after the middle of last year. We've been here before and none of the 'remedies' seem to have prevented prices from rising at pace.
Whilst low interest rates are a major catalyst for increasing house prices, it fundamentally comes down to a supply side issue that many countries haven’t solved, including New Zealand.
Some people retain a negative view on the housing market on the basis of an expectation that the economy is stuck in recession. Actually, the recession ended two months ago and there is little chance of it returning then morphing into a depression.