Westpac economists expect annual house price inflation will peak at 20% later this year, 'which is not an environment conducive to further OCR cuts'.

Never in my life have I seen this. 20% increase per year is too much for the young adults, the new generation of ........renters.
And not forgetting the grey ones, those about to retire and need to buy a house, and can't get a loan.

aklreels - 2021-01-23 09:36:00

... economists expect ...

Most hadn't expected the prices to rise. Economists and Meteorologists - get it right some times.

soundsgood - 2021-01-23 09:40:00

Economists have predicted 8 out of the last three recessions.

sparkychap - 2021-01-23 09:47:00

Who was the prominent economist who said that buying a house was a bad idea? Possibly it was 20 to 30 years ago. Is he still an economist?

trade4us2 - 2021-01-23 10:57:00

trade4us2 wrote:

Who was the prominent economist who said that buying a house was a bad idea? Possibly it was 20 to 30 years ago. Is he still an economist?

He bought a house.

sw20 - 2021-01-23 11:02:00

sparkychap wrote:

Economists have predicted 8 out of the last three recessions.

Which ones did they miss?

smallwoods - 2021-01-23 12:38:00

smallwoods wrote:

Which ones did they miss?

dunno - ask three statisticians and get 5 answers

sparkychap - 2021-01-23 12:51:00

sw20 wrote:

He bought a house.

Shamubeel Eaqub - and yes he did buy a house

funkydunky - 2021-01-23 12:53:00

Heres a joke he told to the audience at his Zombie Wanganui speech:

Man walking along a road in the countryside comes across a shepherd and a huge flock of sheep. Tells the shepherd, "I will bet you $100 against one of your sheep that I can tell you the exact number in this flock." The shepherd thinks it over; it's a big flock so he takes the bet. "973," says the man. The shepherd is astonished, because that is exactly right. Says "OK, I'm a man of my word, take an animal." Man picks one up and begins to walk away.
"Wait," cries the shepherd, "Let me have a chance to get even. Double or nothing that I can guess your exact occupation." Man says sure. "You are an economist for a government think tank," says the shepherd. "Amazing!" responds the man, "You are exactly right! But tell me, how did you deduce that?"
"Well," says the shepherd, "put down my dog and I will tell you."

funkydunky - 2021-01-23 12:56:00

aklreels wrote:

Westpac economists expect annual house price inflation will peak at 20% later this year, 'which is not an environment conducive to further OCR cuts'.

Never in my life have I seen this. 20% increase per year is too much for the young adults, the new generation of ........renters.
And not forgetting the grey ones, those about to retire and need to buy a house, and can't get a loan.

they won’t be able to rent. Too expensive. It will be trailer parks, caravans on Mum and dads front lawn. Sleeping in garages.

I am disgusted by the way the housing wealth has been let get into too few hands. We all know that home ownership brings stability.

It’s like the politicians have been put to destroy the family unit and disrupt people so they turn into transients with broken relationships from all the pressure.

lakeview3 - 2021-01-23 14:36:00

And on inflation
"The consumers price index for the three months ended December rose 0.5 percent, against forecasts of no change or only a slight rise.
The annual inflation rate was unchanged at 1.4 percent."
"However, the cost of building a new house continued apace, rising 1.3 percent during the quarter, the fastest rate in more than two years house

Yet house price inflation is at 20%. Something is not right, how will average Joe and Jane live? I feel that if Jacinda can't do anything about this, Judith will be the next premier. But we'll see the cycle repeating again.

aklreels - 2021-01-23 17:36:00

Some news from Australia

House values in major cities rose 0.9% last month, CoreLogic Inc. data released Monday showed. For the year, prices gained 2%, defying concern home values would plunge after coronavirus lockdowns pushed Australia into its first recession in almost three decades.

Instead, Australia joined countries from New Zealand to the U.K. and the U.S. where property markets have surged during the pandemic, as record low interest rates fuel demand, pushing buyers to compete for a scarce supply of listings. The desire for more spacious houses as people worked from home has also buoyed prices.

aklreels - 2021-01-23 18:37:00

aklreels wrote:

And on inflation
"The consumers price index for the three months ended December rose 0.5 percent, against forecasts of no change or only a slight rise.
The annual inflation rate was unchanged at 1.4 percent."
"However, the cost of building a new house continued apace, rising 1.3 percent during the quarter, the fastest rate in more than two years house

Yet house price inflation is at 20%. Something is not right, how will average Joe and Jane live? I feel that if Jacinda can't do anything about this, Judith will be the next premier. But we'll see the cycle repeating again.

Overseas the housing shortage problem is usually sorted by providing specially designated areas for high density owner built housing, with an environmentally friendly use of recycled materials. (slums)

apollo11 - 2021-01-23 19:07:00

funkydunky wrote:

Shamubeel Eaqub - and yes he did buy a house

I don't think $4000 cash is a lot to buy a house with. After 50 years it has turned into $3 million. I made the right decision.

https://www.stuff.co.nz/business/opinion-analysis/94966044/s
hamubeel-eaqub-ive-bought-a-house-at-last

Edited by trade4us2 at 8:06 pm, Sat 23 Jan

trade4us2 - 2021-01-23 20:05:00

J Adern
She cited the Government’s plans to increase housing supply, announced in May last year, to add a further 8000 houses to Kāinga Ora’s state house building programme, taking it to 18,000 by 2024.

Is this the best that our Givernment can do?
Unless we are prepared to do something, some of our bright young NZlanders will migrate. And a majority of NZlanders retire without a home in their name.
Why can't
Political parties change the law.
1. re-define inflation to include housing, hence the Reserve Bank has a mandate to act in run-away house inflation.
2. enact laws to prohibit/discourage a person or his
/her trusts from owning more than one investment property.

aklreels - 2021-01-25 06:55:00

Inflation already includes the cost of housing.

sparkychap - 2021-01-25 07:23:00

Don Brash
"The Government doesn't want to drop house prices. They want to help first-home buyers into houses by providing more incentives to help them, thereby increasing demand - but doing nothing for supply. Prices just continue to go up."

Dear Sir, I remember that you were the head, RBNZ. Please STOP THE SPIN.
Oops you are in the Opposition now, and your role is to down-play the Government..

aklreels - 2021-01-25 07:34:00

lakeview3 wrote:

It will be trailer parks, caravans on Mum and dads front lawn. Sleeping in garages.

.

Will be? It already is.
Down the road here there are heaps, some have a cabin, and caravan on the same section....one has cabin, caravan and shipping container.
I live with my mum and brother. My son has a cabin at his house....5 of them there.

lythande1 - 2021-01-25 07:40:00

Extract from Interest.co
"Kiwibank economists are suggesting the Reserve Bank should move to force banks to more highly price riskier home loans such as interest-only and investor loans."
"Someone walking into a bank with a 30% deposit, to upgrade their home, should receive a lower interest rate than a leveraged investor buying their 5th investment property on interest only," they say.
But they do acknowledge that any tweaks to mortgage rates won't fix the housing problem, "not even close".

aklreels - 2021-01-27 14:20:00

This message was deleted.

mals69 - 2021-01-28 00:01:00

Interest rates play one part in a complex equation. In the 80's rates were sky high yet Auckland tripled over the decade. It's been said over and over, supply is the issue and until that is addressed prices will rocket regardless of Government or interest rate.

jeffqv - 2021-01-28 11:44:00

RNZ News
"CoreLogic senior property economist Kelvin Davidson said there was a rising possibility that a 40 percent deposit requirement for investors could be officially mandated later in the year by the Reserve Bank.

"While we've already seen the Reserve Bank move to reinstate LVR (loan-to-value restrictions) speed limits at 30 percent from 1 March, the question is, will this be the end point," Davidson said.

"The last time that mortgaged investors had a market share near this high was 28 percent back in Q3 2016 when the Reserve Bank imposed a 40 percent deposit requirement."

aklreels - 2021-01-28 18:59:00

Until the government of the day does a post EQ Christchurch 2.0 on the whole country prices are only going one way. Open up land, let developers fall over themselves to build build build. We only just back to 1974 consent levels of 37,000 a year. With two million more people to house!

sw20 - 2021-01-28 23:26:00

Sure, but Chch was different - that was largely enabled by an massive inflow of reinsurance funds from overseas and government spending. We could also bring in alot of cheap overseas labour.

Also Christchurch is lucky in that it does have alot of flat land inland and satellite towns that have been able to expand. Auckland, Wellington (the other two key population centres with high price growth) don't have that luxury. There's lots of land for development, but it's largely in the outer burbs - Aotea, Whitby, Riverstone Terraces, Wallaceville etc and even there the developers are controlling the release of sections, not the council. Hundreds of sections already consented for development, just held by developers.

And part of that comes down to capacity. Talking to a contact in the building industry in Christchurch yesterday and he was telling me that the industry is at capacity there. I suspect this is true across the country.

sparkychap - 2021-01-29 07:39:00

Of course the inflation will continue. Apart from 'new buyers' how many people were able to immediatly reduce their mortage rate when the lower rates were announced? Not many, most people would of already locked into a fixed rate for 1, 2 or 5 years which was the best at the time, and the costs of early repayment fees generally make this option not viable. It is probably only now those already on fixed rates are starting to be able to have the benefit of lower rates - and some of these people will of started with paying interest rates in the 10% category or higher back in the day.

brouser3 - 2021-01-29 09:59:00

If all the economists in the world were stacked end to end, they would still not reach a conclusion !!

onl_148 - 2021-01-29 13:05:00

apollo11 wrote:

Overseas the housing shortage problem is usually sorted by providing specially designated areas for high density owner built housing, with an environmentally friendly use of recycled materials. (slums)

Gee that is a great idea, I'm all for it..but of course there would not be any suitable areas near my home for that sort of development.
Signed
The Numbie

onl_148 - 2021-01-29 13:09:00

onl_148 wrote:

If all the economists in the world were stacked end to end, they would still not reach a conclusion !!

Where is that place 'A conclusion' ???? I think there are lots of people who would like to reach it.

brouser3 - 2021-01-29 14:39:00

apollo11 wrote:

Overseas the housing shortage problem is usually sorted by providing specially designated areas for high density owner built housing, with an environmentally friendly use of recycled materials. (slums)

We have those specially designated areas for high density owner built housing - the only difference is that here use of recycled materials is not allowed .........

brouser3 - 2021-01-29 14:41:00