Tweet
Damien Grant: House prices - pundits just don't have a clue
By Damien Grant
5:30 AM Sunday Dec 18, 2011
No new stock coming into the market means a lack of supply and so prices rise. Photo / Chris Skelton
No newspaper pundit worth his remittance can avoid writing about the Auckland property market. Before I wade into this fetid pool, let me disclose that I do not own property. I do not understand real estate.
Which begs the question, why would you bother wasting the precious minutes of your Sunday reading any further?
Because I know as much as every other newspaper pundit. Nothing. This does not stop the column inches, of course. If you pay a clown to dance, he will dance. Does not make it ballet.
So, let's look at what we actually know affects house prices:
Building consents are at record lows. No new stock coming into the market means a lack of supply, prices rise.
Net migration has turned negative. No effect there, but the immigration spigot can be used to boost flagging economic fortunes. Possible tick to price rises.
Long-term population growth is increasing. Stats New Zealand has us at five million by the middle of the next decade, we must live somewhere. Another price rise tick.
Interest rates are low and likely to remain so, which allows people to leverage themselves until their noses bleed. They will, driving up prices.
Land in Auckland is constrained. The Super City wants us to build up, but we want to spread out. Expect prices to rise.
By Damien Grant
5:30 AM Sunday Dec 18, 2011
No new stock coming into the market means a lack of supply and so prices rise. Photo / Chris Skelton
No newspaper pundit worth his remittance can avoid writing about the Auckland property market. Before I wade into this fetid pool, let me disclose that I do not own property. I do not understand real estate.
Which begs the question, why would you bother wasting the precious minutes of your Sunday reading any further?
Because I know as much as every other newspaper pundit. Nothing. This does not stop the column inches, of course. If you pay a clown to dance, he will dance. Does not make it ballet.
So, let's look at what we actually know affects house prices:
Building consents are at record lows. No new stock coming into the market means a lack of supply, prices rise.
Net migration has turned negative. No effect there, but the immigration spigot can be used to boost flagging economic fortunes. Possible tick to price rises.
Long-term population growth is increasing. Stats New Zealand has us at five million by the middle of the next decade, we must live somewhere. Another price rise tick.
Interest rates are low and likely to remain so, which allows people to leverage themselves until their noses bleed. They will, driving up prices.
Land in Auckland is constrained. The Super City wants us to build up, but we want to spread out. Expect prices to rise.
Comment