Real estate, post level 4

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#2807631 4-Nov-2021 17:48

quickymart:

This would be interesting if it happened.

https://www.stuff.co.nz/business/300445514/house-price-crash-warning-its-impossible-to-save-people-from-their-mistakes-forever

I've been following economists since 2003, and they've been warning of house price crash since the day I followed them. So far, they have been 100% wrong. I was dumb enough to believe them every day since then. I stopped following them when they got the pandemic house price prediction wrong. Believed them even then. Completely shut off listening to them since. John Key has something to say today - google it. I am not reading it. Weather forecast has had more correct days for me.

But one day they could be correct.

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#2807632 4-Nov-2021 17:50

lxsw20:

Considering locking in for 2 Year at 3.99% on offer for 2 years. My current fixed term expires in June, but looking at the way things are going it's probably worth the hit of paying an extra 1.5% for 6 months.

I recall they had 2.99 for 5 years a few months ago. Should have broke my loan and locked that in. Oh well, retrospectoscopes are the best instruments on earth.

mattwnz

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#2807639 4-Nov-2021 18:03

Batman:

quickymart:

This would be interesting if it happened.

https://www.stuff.co.nz/business/300445514/house-price-crash-warning-its-impossible-to-save-people-from-their-mistakes-forever

I've been following economists since 2003, and they've been warning of house price crash since the day I followed them. So far, they have been 100% wrong. I was dumb enough to believe them every day since then. I stopped following them when they got the pandemic house price prediction wrong. Believed them even then. Completely shut off listening to them since. John Key has something to say today - google it. I am not reading it. Weather forecast has had more correct days for me.

But one day they could be correct.

The Reserve banks has said they expect prices to drop back in 2023. A crash according to one NZ housing expert is by more than 20%. That would be hardly anything when prices have risen 40% + in the last few years. Booms and Busts are normal. But NZs economy is essentially a housing market, with bits tacked on. So I suspect the government will do what it can to prevent a crash. But if the worlds economy crashes, we can only ride the wave. IMO the government made a big error by making asset owners the main benefiters of the QE, when they could have done helicopter payments so the entire population benefited, and it should have prevented this asset price explosion we have had. Young people at the moment are pretty much screwed with house prices this high, especially with interest rates rising. House prices may fall to reflect the interest rate rises, or they may just flatline. But most of the property experts I have read, have said that the big house price rises are over for now. But whok nows what will happen, because some of those experts only said last year that house prices could drop.

Handle9

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#2807643 4-Nov-2021 18:11

Batman:

lxsw20:

Considering locking in for 2 Year at 3.99% on offer for 2 years. My current fixed term expires in June, but looking at the way things are going it's probably worth the hit of paying an extra 1.5% for 6 months.

I recall they had 2.99 for 5 years a few months ago. Should have broke my loan and locked that in. Oh well, retrospectoscopes are the best instruments on earth.

It was in April - when I fixed for 5 years @2.99%

mattwnz

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#2807645 4-Nov-2021 18:24

Batman:

lxsw20:

Considering locking in for 2 Year at 3.99% on offer for 2 years. My current fixed term expires in June, but looking at the way things are going it's probably worth the hit of paying an extra 1.5% for 6 months.

I recall they had 2.99 for 5 years a few months ago. Should have broke my loan and locked that in. Oh well, retrospectoscopes are the best instruments on earth.

A pity all the banks now seem to have removed the 7 year rates a number of months ago. I was skeptical for their reasons, which were apparently few people were taking up the rates. But I would think more people now would want to fix at these lower rates for longer.

In the US it appears they can get a 30 year fixed term.

Sure quite a few people would jump at 2.75% fixed for 30 years!

I would be scared to borrow all this money for a NZ house, and then have that uncertainty of how high rates could go.

tdgeek

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#2807654 4-Nov-2021 18:36

Zeon:

tdgeek:

Hindsight, but if this happened again, the better option (if it was possible) was to exclude mortgages from interest rate reductions, and focus that extra unearned interest revenue on business support somehow

(Unearned, as interest effectively overcharged)

Banks will hardly give you a look for SME lending unless you offer up property as collateral so it does create some complexities... With crazy house prices it upped the collateral for SME loans which may have been necessary and was part of the plan all along?

SME = Small and Medium Enterprise? If so, that's business, I'm talking RES mortgages.

tdgeek

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#2807655 4-Nov-2021 18:39

mattwnz:

But I would think more people now would want to fix at these lower rates for longer.

If I was a money lender and we all know rates will rise, I would not want to lend for an age at todays rates.

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mattwnz

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#2807656 4-Nov-2021 18:44

tdgeek:

mattwnz:

But I would think more people now would want to fix at these lower rates for longer.

If I was a money lender and we all know rates will rise, I would not want to lend for an age at todays rates.

I wonder how they are able to do 2.75% for 30 years in the US. Surely these banks are also borrowing for that term in order to lend for that term.

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#2807657 4-Nov-2021 18:45

tdgeek:
mattwnz:

But I would think more people now would want to fix at these lower rates for longer.

If I was a money lender and we all know rates will rise, I would not want to lend for an age at todays rates.

They don’t care. They lend to a consumer at a certain rate for a term and sell bonds to an investor for the same term less their margin. All they care about is their margin.

tdgeek

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#2807659 4-Nov-2021 18:48

mattwnz:

I wonder how they are able to do 2.75% for 30 years in the US. Surely these banks are also borrowing for that term in order to lend for that term.

As per Handles post I guess.

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#2811177 11-Nov-2021 16:25

Wouldn't this be nice (for first home buyers or anyone looking to buy):

https://www.interest.co.nz/property/113161/nzs-extremely-high-current-levels-housing-constructon-cannot-be-sustained-without

Shadowfoot

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#2811180 11-Nov-2021 16:37

quickymart:

Wouldn't this be nice (for first home buyers or anyone looking to buy):

https://www.interest.co.nz/property/113161/nzs-extremely-high-current-levels-housing-constructon-cannot-be-sustained-without

That seems backwards. The houses are being built because there is a demand for them, and I wouldn't expect more to continue being built at the same rate when the demand drops. I can't see it as a need to increase immigration just because there are a lot of houses being built and no one demanding them.

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mattwnz

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#2811194 11-Nov-2021 16:58

quickymart:

Wouldn't this be nice (for first home buyers or anyone looking to buy):

https://www.interest.co.nz/property/113161/nzs-extremely-high-current-levels-housing-constructon-cannot-be-sustained-without

Prior to covid, I understand the net migration was about 80,000 people in that previous year which is high. That needs tens of thousands of new houses to be built a year just to house them. IMO it makes no sense to import people to support the NZ housing market, but I guess that is what we have been doing over the last decade. It then needs a lot of money spending on increasing infrastructure in al departments which doesn't happen. The worlds rapid population increase is killing the planet too, and I understand the government is going to be reducing immigration to a more sustainable level in the future, but I don't know what numbers that means. But we do also have 165,000 people now in NZ who could be eligible to become residents, and they could add a lot to the demand for buying housing. What is NZs ideal and peak population? Don't we need some new towns and cities, rather than just expanding the boundaries of existing ones, and increasing travel needed?.

mattwnz

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#2811195 11-Nov-2021 17:00

Shadowfoot:

quickymart:

Wouldn't this be nice (for first home buyers or anyone looking to buy):

https://www.interest.co.nz/property/113161/nzs-extremely-high-current-levels-housing-constructon-cannot-be-sustained-without

That seems backwards. The houses are being built because there is a demand for them, and I wouldn't expect more to continue being built at the same rate when the demand drops. I can't see it as a need to increase immigration just because there are a lot of houses being built and no one demanding them.

What are the builders going to do, material suppliers, banks etc? NZs economy is largely a housing market with bits tacked on.

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#2812423 14-Nov-2021 06:52

https://www.nzherald.co.nz/nz/property-traders-flipping-auckland-homes-for-100k-more-just-days-after-bought/GFKOK6XWQ57PJCX6P6TQ56VW6U/

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