Real estate, post level 4

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#2762156 18-Aug-2021 09:23

Handsomedan:

tdgeek:

How's that? We are in lockdown, now I need to buy a house or sell mine and get another?

Yes. How do you not understand? It's the way. If there's a disruption to the normal way of life, you MUST buy and sell houses. You absolutely must!

Ah right, thanks for that! The OCR is not being delayed, so factor in increased interest rates too!

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#2762175 18-Aug-2021 10:15

now predicting no change in interest rates.

https://www.nzherald.co.nz/business/major-banks-do-u-turn-now-expect-no-change-in-ocr/ONAVZ4ZA5U3C2AHHQFVPUB2XG4/

shk292

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#2762365 18-Aug-2021 11:51

mattwnz:

What surprises me is how low lying houses close to the sea and on the waterfront are selling for such high prices when there are going to be rising sea levels, and more weather events like we have seen over the last couple of years in Wellington. Maybe they expect the taxpayer will bail them out.

I've often wondered about that - my view is that t is an indication of how many people really believe in the predicted sea level rises, and also believe that we won't be able to do anything about it. If you look at the levels predicted, and then at places like the Netherlands, it shouldn't be beyond the wit of man to protect vulnerable areas of towns.

heavenlywild

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#2762496 18-Aug-2021 14:28

No OCR change today!

https://www.interest.co.nz/news/111824/reserve-bank-decides-leave-official-cash-rate-unchanged-due-uncertainty-new-outbreak

Up, up and away the house prices go I suspect!

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mattwnz

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#2762538 18-Aug-2021 15:37

heavenlywild:

No OCR change today!

https://www.interest.co.nz/news/111824/reserve-bank-decides-leave-official-cash-rate-unchanged-due-uncertainty-new-outbreak

Up, up and away the house prices go I suspect!

It was totally predictable, because the only thing that would have prevent the OCR going up was another lockdown. I never thought it would happen in such a short period of time after last week predicting it could happen and probably jinxed it.

Except what will drive more increases, when banks are already increasing the interest rates? FOMO and post lockdown insanity, which is what governor said a few months ago was the only thing currently driving prices upwards? The government have to be careful it isn't becoming a bubble. I have already heard of some people in Auckland struggling to get tenants for their rentals and having to offer discounts.

mattwnz

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#2762542 18-Aug-2021 15:43

Handsomedan:

tdgeek:

How's that? We are in lockdown, now I need to buy a house or sell mine and get another?

Yes. How do you not understand? It's the way. If there's a disruption to the normal way of life, you MUST buy and sell houses. You absolutely must!

And toilet paper. It is the covid effect occurring all around the world, and NZ is no different. It is the animal instinct in us. Monkeys do the same thing, they hoard bananas, and stop other monkeys getting them, even if those other monkeys starve. Houses and toilet paper (plus bread, yeast, rice flour etc) are the equivalent of bananas

halper86

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#2762664 18-Aug-2021 17:54

Going to be tough times when the OCR gets upped, I feel sorry for all the FHBs with high DTI ratios - but then I do not as they took a risk. All of my social circle is divided into two, my argument is will the govt save you in a share market crash? Never have before, why now..

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antonknee

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#2762673 18-Aug-2021 18:06

halper86:

Going to be tough times when the OCR gets upped, I feel sorry for all the FHBs with high DTI ratios - but then I do not as they took a risk. All of my social circle is divided into two, my argument is will the govt save you in a share market crash? Never have before, why now..

Totally agree. We shouldn’t be bailing out people who buy houses. Particularly not investors (even if they are mum and dad investors).

Pragmatically though, so much of our economy is now built on or reliant on the ridiculous Ponzi scheme that is housing in this country; there is a real fear that if you don’t bail homeowners out it could have some sever impacts on the rest of the economy.

tdgeek

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#2762677 18-Aug-2021 18:11

mattwnz:

And toilet paper. It is the covid effect occurring all around the world, and NZ is no different. It is the animal instinct in us. Monkeys do the same thing, they hoard bananas, and stop other monkeys getting them, even if those other monkeys starve. Houses and toilet paper (plus bread, yeast, rice flour etc) are the equivalent of bananas

If you hoard stuff, the overall usage is unchanged. Houses are not like that.

tdgeek

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#2762678 18-Aug-2021 18:16

antonknee:

Pragmatically though, so much of our economy is now built on or reliant on the ridiculous Ponzi scheme that is housing in this country; there is a real fear that if you don’t bail homeowners out it could have some sever impacts on the rest of the economy.

I dont agree. All of us that own houses have always had ample opportunity to borrow on it. If you dont own a house you can still borrow. Home owners pre or post this boom do not see $50 notes piling up on the back lawn. Ask all this how the mortgage payment are going. Same as usual. Bit cheaper now thats good, gets a bit more later no issue. Home owners and non home owners have the same problem with borrowing. You have to pay it back. Having equity helps with the loan but it doesn't pay it back.

quickymart

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#2762689 18-Aug-2021 18:38

https://www.oneroof.co.nz/news/40006

tdgeek

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#2762707 18-Aug-2021 18:59

quickymart:

https://www.oneroof.co.nz/news/40006

No. Its taken many years of gradual and thus unnoticed changes to affordability, then we hit the low wage economy, immigration, now Covid. We adapted earlier by having kids later, using two incomes to manage a deposit It will take many many years to resolve that. I cannot see any move that will materially help affordability, nor do I see masses of auctions just because we got locked down.

antonknee

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#2762712 18-Aug-2021 19:14

tdgeek:

antonknee:

Pragmatically though, so much of our economy is now built on or reliant on the ridiculous Ponzi scheme that is housing in this country; there is a real fear that if you don’t bail homeowners out it could have some sever impacts on the rest of the economy.

I dont agree. All of us that own houses have always had ample opportunity to borrow on it. If you dont own a house you can still borrow. Home owners pre or post this boom do not see $50 notes piling up on the back lawn. Ask all this how the mortgage payment are going. Same as usual. Bit cheaper now thats good, gets a bit more later no issue. Home owners and non home owners have the same problem with borrowing. You have to pay it back. Having equity helps with the loan but it doesn't pay it back.

Sorry I don’t understand your point? Maybe I am missing some context or have misunderstood you.

The reality per the post I quoted is that people with high DTIs will hurt more than people with low DTIs when rates go up, but that’s just how it is. That poster also stated that the government wouldn’t save people hurt by a share market crash, so why should housing be different - to which my point is that we have let housing become so unhealthy in this country that we have to prop it up if there’s a problem, because housing problems would send horrendous shockwaves through the rest of our economy.

To your point you don’t see cash in the backyard, that’s true. But you can borrow against all that unearned equity if you wish, and when you sell that is cash in hand. Would also say you have to pay back a lot more now than you did 20 years ago.

antonknee

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#2762715 18-Aug-2021 19:20

tdgeek:

quickymart:

https://www.oneroof.co.nz/news/40006

No. Its taken many years of gradual and thus unnoticed changes to affordability, then we hit the low wage economy, immigration, now Covid. We adapted earlier by having kids later, using two incomes to manage a deposit It will take many many years to resolve that. I cannot see any move that will materially help affordability, nor do I see masses of auctions just because we got locked down.

Absolutely. I think anyone hoping a lockdown will cause house prices to decrease is naïve. Actually I think anyone who thinks “one quick trick” will materially impact house prices is incredibly naïve. As you rightly point out, we didn’t get into this situation overnight (although the sharp jump since the first lockdown does feel like it was almost overnight), so we won’t be getting out of it overnight.

tdgeek

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#2762719 18-Aug-2021 19:30

antonknee:

Sorry I don’t understand your point? Maybe I am missing some context or have misunderstood you.

The reality per the post I quoted is that people with high DTIs will hurt more than people with low DTIs when rates go up, but that’s just how it is. That poster also stated that the government wouldn’t save people hurt by a share market crash, so why should housing be different - to which my point is that we have let housing become so unhealthy in this country that we have to prop it up if there’s a problem, because housing problems would send horrendous shockwaves through the rest of our economy.

To your point you don’t see cash in the backyard, that’s true. But you can borrow against all that unearned equity if you wish, and when you sell that is cash in hand. Would also say you have to pay back a lot more now than you did 20 years ago.

Sorry, more me, I jumped on the Ponzi comment

Of all the owned homes, I imagine not many % are bought high that I can just afford with low interest rates. No need to bail out. Any that hit negative equity, unlike the US where you walk, if you can pay the mortgage you stay put. if you cannot, downgrade, the Govt or banks dont want foreclosures. I dont see shockwaves, apart from the few % that bought high and took the risk

Anyone can borrow. if you own a home and borrow, that has always applied. When you sell is it cash in hand? if you change houses its the same market. You could move from Auckland to Gore and make a bundle but you could always do that

20 years ago the interest was higher. id say that many products now are cheaper vs annual income than back then. Interest now is cheap. But its a numbers game between cost and income and interest. Its slowly slid to make it more difficult for new buyers, and who its been recognised, its not been touched. I imagine interest rates will rise slow, so it's gradual. Building will improve, also gradual. I dont see shockwaves though.

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