Banks Stop Loaning to Foreign House Buyers

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Forums › Finance and wealth management › Banks Stop Loaning to Foreign House Buyers

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#1569606 10-Jun-2016 17:18

MikeB4:

Linuxluver:

Canada is facing the same issues around property and foreign investors...and mainly from China...and overheated housing markets in the largest cities (while other regional and smaller towns are status or falling).

In this article in Macleans magazine (sort of Canada's equivalent to Time magazine in the US or The Listener here in NZ) they talk about how Canadian banks are moving actively to cool down property lending. For much of the article you could replace "Canada" with "new Zealand" and you could be talking about them interchangeably.

Note also the banks who have moved here in NZ appear to have done so in Australia either at the same time or very recently.

So.....this isn't just NZ. It's much bigger and wider than that. Behind it all are the central banks and their concern over debt levels and lending and rapidly-rising property prices in a context where - they know - most of the rest of these economies is on shakey ground.

No conspiracy here......just neo-liberalism heading for the same cliff everywhere.

As citizens and voters we have the opportunity every few years to chose who should be the government. It seems staringly obvious that to continue to elect governments with a neo-liberal economic agenda verges on the insane. Canada woke up and dumped it's Conservatives recently. The Australians are having an election shortly. The UK re- elected - thanks to First Past the Post - a conservative government that 65% of voters didn't vote for.....so clearly, they tried, but the voting system meant they just couldn't do it even if almost 2/3s of voters didn't want the Tories.

Our turn next year. More of this destructive nonsense? haven't we had enough since 1984?

So the crisis-du-jour is property. Or is is climate change? Or maybe growing income inequality? Burgeoning debt? The list goes.

Over my many many decades on this rock I have only experienced a few years of financial stability in NZ. As a National supporter I often how successful this financial system we have really is and often doubt does the West have it wrong.

I'm not really sure what you both are saying in relation to the credit policies of banks.

MikeB4

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#1569609 10-Jun-2016 17:23

mattwnz:
MikeB4:

Over my many many decades on this rock I have only experienced a few years of financial stability in NZ. As a National supporter I often how successful this financial system we have really is and often doubt does the West have it wrong.

But do you actually understand it, and how borrowing keeps going up and up. Very few people do understand the whole thing, even financial experts I don't think understand it, as 50% of them say one thing, and 50% say the opposite.

David Lange described those involved in the financial sector as being like "demented reef fish" his description was accurate so that fits well with the unfathomable financial sector.

Here is a crazy notion, lets give peace a chance.

MikeB4

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#1569612 10-Jun-2016 17:28

Hammerer:
MikeB4:

Linuxluver:

Canada is facing the same issues around property and foreign investors...and mainly from China...and overheated housing markets in the largest cities (while other regional and smaller towns are status or falling).

In this article in Macleans magazine (sort of Canada's equivalent to Time magazine in the US or The Listener here in NZ) they talk about how Canadian banks are moving actively to cool down property lending. For much of the article you could replace "Canada" with "new Zealand" and you could be talking about them interchangeably.

Note also the banks who have moved here in NZ appear to have done so in Australia either at the same time or very recently.

So.....this isn't just NZ. It's much bigger and wider than that. Behind it all are the central banks and their concern over debt levels and lending and rapidly-rising property prices in a context where - they know - most of the rest of these economies is on shakey ground.

No conspiracy here......just neo-liberalism heading for the same cliff everywhere.

As citizens and voters we have the opportunity every few years to chose who should be the government. It seems staringly obvious that to continue to elect governments with a neo-liberal economic agenda verges on the insane. Canada woke up and dumped it's Conservatives recently. The Australians are having an election shortly. The UK re- elected - thanks to First Past the Post - a conservative government that 65% of voters didn't vote for.....so clearly, they tried, but the voting system meant they just couldn't do it even if almost 2/3s of voters didn't want the Tories.

Our turn next year. More of this destructive nonsense? haven't we had enough since 1984?

So the crisis-du-jour is property. Or is is climate change? Or maybe growing income inequality? Burgeoning debt? The list goes.

Over my many many decades on this rock I have only experienced a few years of financial stability in NZ. As a National supporter I often how successful this financial system we have really is and often doubt does the West have it wrong.

I'm not really sure what you both are saying in relation to the credit policies of banks.

The banks are promoting their actions as being altruistic I am sceptical as it is out of character.

Here is a crazy notion, lets give peace a chance.

Fred99

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#1569615 10-Jun-2016 17:31

mattwnz:

MikeB4:

Over my many many decades on this rock I have only experienced a few years of financial stability in NZ. As a National supporter I often how successful this financial system we have really is and often doubt does the West have it wrong.

But do you actually understand it, and how borrowing keeps going up and up. Very few people do understand the whole thing, even financial experts I don't think understand it, as 50% of them say one thing, and 50% say the opposite.

Half of the published "expert" comments in the media are from bank economists and real estate executives or investors. Not in your wildest dreams are they impartial.

Impartial experts show a bit more consensus - that we've let this go too long, that it's going to fail, and it's really going to hurt when it does.

geekiegeek

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#1569617 10-Jun-2016 17:34

Linuxluver:

Canada is facing the same issues around property and foreign investors...and mainly from China...and overheated housing markets in the largest cities (while other regional and smaller towns are status or falling).

In this article in Macleans magazine (sort of Canada's equivalent to Time magazine in the US or The Listener here in NZ) they talk about how Canadian banks are moving actively to cool down property lending. For much of the article you could replace "Canada" with "new Zealand" and you could be talking about them interchangeably.

Note also the banks who have moved here in NZ appear to have done so in Australia either at the same time or very recently.

So.....this isn't just NZ. It's much bigger and wider than that. Behind it all are the central banks and their concern over debt levels and lending and rapidly-rising property prices in a context where - they know - most of the rest of these economies is on shakey ground.

No conspiracy here......just neo-liberalism heading for the same cliff everywhere.

As citizens and voters we have the opportunity every few years to chose who should be the government. It seems staringly obvious that to continue to elect governments with a neo-liberal economic agenda verges on the insane. Canada woke up and dumped it's Conservatives recently. The Australians are having an election shortly. The UK re- elected - thanks to First Past the Post - a conservative government that 65% of voters didn't vote for.....so clearly, they tried, but the voting system meant they just couldn't do it even if almost 2/3s of voters didn't want the Tories.

Our turn next year. More of this destructive nonsense? haven't we had enough since 1984?

So the crisis-du-jour is property. Or is is climate change? Or maybe growing income inequality? Burgeoning debt? The list goes.

To be fair, I'm not seeing a silver bullet from the opposition that will fix this or am I missing something?

MikeB4

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#1569622 10-Jun-2016 17:41

Fred99:
mattwnz:

MikeB4:

Over my many many decades on this rock I have only experienced a few years of financial stability in NZ. As a National supporter I often how successful this financial system we have really is and often doubt does the West have it wrong.

But do you actually understand it, and how borrowing keeps going up and up. Very few people do understand the whole thing, even financial experts I don't think understand it, as 50% of them say one thing, and 50% say the opposite.

Half of the published "expert" comments in the media are from bank economists and real estate executives or investors. Not in your wildest dreams are they impartial.

Impartial experts show a bit more consensus - that we've let this go too long, that it's going to fail, and it's really going to hurt when it does.

^^^
Yep

Here is a crazy notion, lets give peace a chance.

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MikeB4

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#1569624 10-Jun-2016 17:44

geekiegeek:
Linuxluver:

Canada is facing the same issues around property and foreign investors...and mainly from China...and overheated housing markets in the largest cities (while other regional and smaller towns are status or falling).

In this article in Macleans magazine (sort of Canada's equivalent to Time magazine in the US or The Listener here in NZ) they talk about how Canadian banks are moving actively to cool down property lending. For much of the article you could replace "Canada" with "new Zealand" and you could be talking about them interchangeably.

Note also the banks who have moved here in NZ appear to have done so in Australia either at the same time or very recently.

So.....this isn't just NZ. It's much bigger and wider than that. Behind it all are the central banks and their concern over debt levels and lending and rapidly-rising property prices in a context where - they know - most of the rest of these economies is on shakey ground.

No conspiracy here......just neo-liberalism heading for the same cliff everywhere.

As citizens and voters we have the opportunity every few years to chose who should be the government. It seems staringly obvious that to continue to elect governments with a neo-liberal economic agenda verges on the insane. Canada woke up and dumped it's Conservatives recently. The Australians are having an election shortly. The UK re- elected - thanks to First Past the Post - a conservative government that 65% of voters didn't vote for.....so clearly, they tried, but the voting system meant they just couldn't do it even if almost 2/3s of voters didn't want the Tories.

Our turn next year. More of this destructive nonsense? haven't we had enough since 1984?

So the crisis-du-jour is property. Or is is climate change? Or maybe growing income inequality? Burgeoning debt? The list goes.

To be fair, I'm not seeing a silver bullet from the opposition that will fix this or am I missing something?

To be fair the only real difference between Labour and National is one letter. So a silver bullet is yet to be found.

Here is a crazy notion, lets give peace a chance.

Batman

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#1569627 10-Jun-2016 17:49

mattwnz:

MikeB4:

Over my many many decades on this rock I have only experienced a few years of financial stability in NZ. As a National supporter I often how successful this financial system we have really is and often doubt does the West have it wrong.

But do you actually understand it, and how borrowing keeps going up and up. Very few people do understand the whole thing, even financial experts I don't think understand it, as 50% of them say one thing, and 50% say the opposite.

Economists are like palm readers, and even meteorologists.

Nobody knows the future with infinite variables. With one variable, yes can easily predict.

It's very common to see two Herald articles side by side one saying house price going up the other saying house price going down! The up is usually a real estate agent, the down is usually economist, and they've been doing that since 2003. 13 years later ... give it a huge amount of time and eventually one of them will get it right.

JimmyH

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#1569649 10-Jun-2016 18:05

joker97:

Economists are like palm readers, and even meteorologists.

Nobody knows the future with infinite variables. With one variable, yes can easily predict.

That's a little unfair, and pretty much setting up a strawman so you can knock it down.

Reputable economists don't claim to be able to predict the future with anything like certainty, and certainly not very far ahead. I'm not aware that they have ever done so. There are too many imponderables - human behaviour, things that happen offshore, the weather (eg a bad harvest). But they do have a pretty good feel for the proximate effects of many policies and the causes of growth etc. They are also pretty good at extrapolating trends based on assumptions and making general statements about whether something is sustainable or a policy change is needed. For example, what will happen to spuerannuation expenses over thirty years IF longevity continues to increase and policy settings aren't changed.

By reputable I mean qualified, experienced, and not working for a bank or political party (of any persuasion) where they are essentially running PR for their paymaster rather than giving unbiased opinion/advice.

It's very common to see two Herald articles side by side one saying house price going up the other saying house price going down! The up is usually a real estate agent, the down is usually economist, and they've been doing that since 2003. 13 years later ... give it a huge amount of time and eventually one of them will get it right.

You are confusing the Herald with an actual newspaper, that has reporters who have the time and competence to distinguish fact from fiction, and runs factual stories.

The Herald mainly just runs whatever clickbait it can source cheaply or for free to fill space and get you to follow the link. Which means that it will run pretty much anything it is handed by anyone purporting to have knowledge, irrespective of qualifications or partisanship. See point about reputable above. I'm only surprised I haven't (yet) seen a link telling me inviting me to click because I will be SHOCKED to haer what Kim Kardsahian said about economic stability when the Reserve Bank didn't move interest rates. Stuff is no better.

Usually I first look at who wrote something before I decide whether it's worth reading. Pro-government, anti-government, and lobbyist puff pieces aren't typically worth the paper they are printed on. Mostly, it's obvious whether an opinion is garbage if you know who the writer works for, and whether they are actually qualified in the subject.

oxnsox

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#1569736 10-Jun-2016 20:05

geekiegeek:
Linuxluver:

Canada is facing the same issues around property and foreign investors...and mainly from China...and overheated housing markets in the largest cities (while other regional and smaller towns are status or falling).

In this article in Macleans magazine (sort of Canada's equivalent to Time magazine in the US or The Listener here in NZ) they talk about how Canadian banks are moving actively to cool down property lending. For much of the article you could replace "Canada" with "new Zealand" and you could be talking about them interchangeably.

Note also the banks who have moved here in NZ appear to have done so in Australia either at the same time or very recently.

So.....this isn't just NZ. It's much bigger and wider than that. Behind it all are the central banks and their concern over debt levels and lending and rapidly-rising property prices in a context where - they know - most of the rest of these economies is on shakey ground.

No conspiracy here......just neo-liberalism heading for the same cliff everywhere.

As citizens and voters we have the opportunity every few years to chose who should be the government. It seems staringly obvious that to continue to elect governments with a neo-liberal economic agenda verges on the insane. Canada woke up and dumped it's Conservatives recently. The Australians are having an election shortly. The UK re- elected - thanks to First Past the Post - a conservative government that 65% of voters didn't vote for.....so clearly, they tried, but the voting system meant they just couldn't do it even if almost 2/3s of voters didn't want the Tories.

Our turn next year. More of this destructive nonsense? haven't we had enough since 1984?

So the crisis-du-jour is property. Or is is climate change? Or maybe growing income inequality? Burgeoning debt? The list goes.

To be fair, I'm not seeing a silver bullet from the opposition
that will fix this or am I missing something?

Because there is no 'silver-bullet'
Whilst other countries are having similar issues, do any of them have the same chronic undersupply which is being turbo driven by unprecedented immigration. I doubt any arrangement of any government would have foreseen this...... and its not an issue with an overnight answer, if only because of build times.
But it would be nice to see some income ratio introduced, along with a mechanism to control rental prices.
If rental prices were restricted (and locked to annual increases tied to the CPI), house price increases would be driven more by supply demand rather than investor returns. Combine that with LVRs &income ratios, and eventually things will even out.......
But I guess that will also happen with the current model, the difference being in who will wear the pain, and when.

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#1569765 10-Jun-2016 21:05

MikeB4:

The banks are promoting their actions as being altruistic I am sceptical as it is out of character.

Likely doing it before the Reserve Bank steps in and places restrictions on the banks. This way they have more control on the policies and when they can relax them.

I doubt the RBNZ is now going to introduce income ratio caps for the time being.

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Geektastic

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#1569799 10-Jun-2016 22:15

oxnsox:
geekiegeek:

Linuxluver:

Canada is facing the same issues around property and foreign investors...and mainly from China...and overheated housing markets in the largest cities (while other regional and smaller towns are status or falling).

In this article in Macleans magazine (sort of Canada's equivalent to Time magazine in the US or The Listener here in NZ) they talk about how Canadian banks are moving actively to cool down property lending. For much of the article you could replace "Canada" with "new Zealand" and you could be talking about them interchangeably.

Note also the banks who have moved here in NZ appear to have done so in Australia either at the same time or very recently.

So.....this isn't just NZ. It's much bigger and wider than that. Behind it all are the central banks and their concern over debt levels and lending and rapidly-rising property prices in a context where - they know - most of the rest of these economies is on shakey ground.

No conspiracy here......just neo-liberalism heading for the same cliff everywhere.

As citizens and voters we have the opportunity every few years to chose who should be the government. It seems staringly obvious that to continue to elect governments with a neo-liberal economic agenda verges on the insane. Canada woke up and dumped it's Conservatives recently. The Australians are having an election shortly. The UK re- elected - thanks to First Past the Post - a conservative government that 65% of voters didn't vote for.....so clearly, they tried, but the voting system meant they just couldn't do it even if almost 2/3s of voters didn't want the Tories.

Our turn next year. More of this destructive nonsense? haven't we had enough since 1984?

So the crisis-du-jour is property. Or is is climate change? Or maybe growing income inequality? Burgeoning debt? The list goes.

To be fair, I'm not seeing a silver bullet from the opposition
that will fix this or am I missing something?

Because there is no 'silver-bullet'
Whilst other countries are having similar issues, do any of them have the same chronic undersupply which is being turbo driven by unprecedented immigration. I doubt any arrangement of any government would have foreseen this...... and its not an issue with an overnight answer, if only because of build times.
But it would be nice to see some income ratio introduced, along with a mechanism to control rental prices.
If rental prices were restricted (and locked to annual increases tied to the CPI), house price increases would be driven more by supply demand rather than investor returns. Combine that with LVRs &income ratios, and eventually things will even out.......
But I guess that will also happen with the current model, the difference being in who will wear the pain, and when.

There are build systems available in the world that would cut house construction times by 80%. We just do not use them, by and large. See for example this video. They will provide more than adequate seismic, fire and insulation properties if appropriately specified.

mentalinc

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#1569802 10-Jun-2016 22:25

Geektastic:

There are build systems available in the world that would cut house construction times by 80%. We just do not use them, by and large. See for example this video. They will provide more than adequate seismic, fire and insulation properties if appropriately specified.

You are joking right?

They built a concrete block shell 23m sq room in three hours. There is only 1 room plus a "bathroom". No roof, no plumbing etc. I'm sure the standard retaining wall blocks could do the same thing...

It's a great to start replacing shanty towns but will be sad to see these popping up any where in NZ.

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#1569806 10-Jun-2016 22:44

mentalinc:

Geektastic:

There are build systems available in the world that would cut house construction times by 80%. We just do not use them, by and large. See for example this video. They will provide more than adequate seismic, fire and insulation properties if appropriately specified.

You are joking right?

They built a concrete block shell 23m sq room in three hours. There is only 1 room plus a "bathroom". No roof, no plumbing etc. I'm sure the standard retaining wall blocks could do the same thing...

It's a great to start replacing shanty towns but will be sad to see these popping up any where in NZ.

Yes, I can see you grasped the concept fully there....

That was called a "demonstration". It's not a completed home, it is a shell ready for pumping the concrete into. The rest of it comes later. The video is designed to show the speed with which a building can be erected compared to traditional systems. You will need to extrapolate the additional time required for bigger buildings, site work, fixtures and fittings and so on.

The point is, you need not wait 8 months for a bunch of half-educated cowboys with nail guns to mess about on site building a large garden shed made of flammable materials that will probably leak, with a roof made of the same material pig sheds are made of.

MikeB4

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#1569807 10-Jun-2016 22:51

Geektastic:
mentalinc:

Geektastic:

There are build systems available in the world that would cut house construction times by 80%. We just do not use them, by and large. See for example this video. They will provide more than adequate seismic, fire and insulation properties if appropriately specified.

You are joking right?

They built a concrete block shell 23m sq room in three hours. There is only 1 room plus a "bathroom". No roof, no plumbing etc. I'm sure the standard retaining wall blocks could do the same thing...

It's a great to start replacing shanty towns but will be sad to see these popping up any where in NZ.

Yes, I can see you grasped the concept fully there....

That was called a "demonstration". It's not a completed home, it is a shell ready for pumping the concrete into. The rest of it comes later. The video is designed to show the speed with which a building can be erected compared to traditional systems. You will need to extrapolate the additional time required for bigger buildings, site work, fixtures and fittings and so on.

The point is, you need not wait 8 months for a bunch of half-educated cowboys with nail guns to mess about on site building a large garden shed made of flammable materials that will probably leak, with a roof made of the same material pig sheds are made of.

It does baffle me that the Germans can construct a house in a few weeks and it takes months here and ends up needing months of remedial work. And cost heaps more after exchange rate differences etc.I know about the code differences but it still does not add up. House building is minefield and it does not need to be.

Here is a crazy notion, lets give peace a chance.

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