House prices may have fallen a little, to give FHBs confidence, but when they apply for a mortgage they’ll find the increasing test rate the banks apply a lot higher than, say, one or two years ago, which will, unfortunately, impact servicing ability and see some miss out.
The continuous focus on house prices is folly if other factors restrict the ability to get into the market. I’m picking this Government will be congratulating themselves on the house price issue, ignoring the fact their policies have increased interest rates that affect those very same buyers. - Terry M
With an OCR now above neutral, and unlikely to fall back for 18 months, the housing market will simply settle at a value that reflects the cost of borrowing today. So, if you bought when the OCR was lower and the market was hot, it’ll drop.
Military activity may well break out in several new flashpoints, so as well as a global slowdown, this puts a big risk into people’s lives as unemployment rises due to both. The housing market will be too much of a risk for many if not for simple shelter. - Adam H
What I don’t understand is how NZ people think... nowhere in the world is housing cheap... you have to pay an arm and a leg for it, be it Germany/US/UK, or anywhere... for that sake, investors in Germany are raking it in due to the policies that [government] put in.... rent for good.
The problem is NZ is a low-wage economy, and no-one has been addressing it for the last three decades.
Second, housing is tied up with interest rates... as it goes up, prices stabilise, and when interest rates come down, house prices go up... there are other caveats, but interest rates take up the majority.
If house prices collapse in NZ [...] it will be doomsday for NZ, and no govt/banks would vouch for that. - Cherian T
In reply to Cherian T:
In Germany, a large percentage of people rent. They also rent a ‘shell’ and install all the interior, including the kitchen.
A lot of housing was built [post-World War II] and government-owned. It was then sold to companies. They are now buying it back.
The model of corporates owning housing and renting out doesn’t work. The only way to increase profits is to increase rent, which is why it is becoming state-owned again. - Kathy A
It is quite irresponsible to encourage FHB into this market. - Michael R
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