Anyone see the Hard Stuff program the other day about house prices?

A number of the suggestions here appeared.

Geektastic:

Anyone see the Hard Stuff program the other day about house prices?

A number of the suggestions here appeared.

To be fair, its been thrashed here, so id say every possible idea is here due to volume

tdgeek:

 

To be fair, its been thrashed here, so id say every possible idea is here due to volume

 

 

 

And as no single idea is likely to simply achieve what's needed - but a coordinated policy covering many areas, finance/taxation, planning/development, immigration etc, and each of these get put into the "too hard basket" as they're all contentious as they could impact negatively on some individuals, the default political position seems to be to do as little as possible, just dabble around the issue and pretend that you're doing something to address the problem.  Even better - pretend that there actually isn't a problem.

Good news, someone new (since 2003) is predicting a big crash! aka I'll believe it when I see it (no i'm not a landlord)

joker97:

 

Good news, someone new (since 2003) is predicting a big crash! aka I'll believe it when I see it (no i'm not a landlord)

 

I didnt see the words crash or big mentioned

Good point. I thought I read it as such on stuff but couldn't find the article so linked to Herald instead

I think stuff changed their title, crash is no longer there, got a "caution" in the stuff title now. I could have completely misread it however

joker97:

 

I think stuff changed their title, crash is no longer there, got a "caution" in the stuff title now. I could have completely misread it however

 

How I take it and see it, is there won't be a crash. While the house to income ratio ain't great, it's a ratio that is still allowing house purchases.

The house prices will likely slow in growth, flatten, maybe drop 5%, maybe 10%. A correction. And no surprise to any recent purchasers. You can't buy 

in a hothouse market and then complain later. Interest rates if they rose would be an issue. Stem prices, force some sales, prices drop more because of over supply.

Even then they will be snapped up if that occurred, there is too much demand to have the bottom fall out of it. Its more about when will rises slow and stabilise for a few years,  as compared to continually rising.    

A significant reduction is only likely if we end up with less people wanting houses than there are houses for sale.

This could be brought about by

• Pandemic
• Global financial collapse
• War
• Actually building houses

Houses clearly are not 'unaffordable' because some people are affording them....it would be more correct to say that they were very expensive.

Having read a recent article in the Sunday papers about the quality of building in the NZ home building industry, the most likely occurrence will be Leaky Homes 2.0 re-named "General Rubbish Building Sold For Way Too Much With No Statutory Liability".

Geektastic:

 

A significant reduction is only likely if we end up with less people wanting houses than there are houses for sale.

 

This could be brought about by

 

• Pandemic
• Global financial collapse
• War
• Actually building houses

Houses clearly are not 'unaffordable' because some people are affording them....it would be more correct to say that they were very expensive.

 

Having read a recent article in the Sunday papers about the quality of building in the NZ home building industry, the most likely occurrence will be Leaky Homes 2.0 re-named "General Rubbish Building Sold For Way Too Much With No Statutory Liability".

 

I think there are only two local reasons why the prices will stop rising. One, is if interest rates started to creep up. The current affordability at todays prices is due to low interest. A couple that could afford a $500,000 loan can now afford a $700,000 loan. Interest is a very large part of repayments. Two, is that if prices kept creeping up, then a point will come where no average couple that work hard and save, can afford to buy. So buyers will only be the well funded, and regular hard working and hard saving Auckland's will be renters, or leave. As that tipping point nears, demand will subside. Yes, the focus may shift to building, as theoretically, building costs rise with inflation, and inflation is low. A better and cheaper transport infrastructure may help people to move to outer and way outer Auckland.  

Last week I was reading about the 'Auckland property crash of 2010'.

Should taxpayers be forking out to boost the wages/salaries for people working in public sector jobs in Auckland - so that for example Auckland schools can attract and retain "better" teachers, some of whom seem to have been claiming that living in Auckland when earning a salary well above the national average is "unaffordable" - or should the market be left to it level itself out?  

Perhaps the solution is to bulk fund - then have fewer but better paid teachers, pack the kids in 40 or 50 to a classroom.