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What is the main driver of property prices ?

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  • What is the main driver of property prices ?

    Apart from the obvious like interest rates, immigration etc the media so often has a hand.
    Do not think it is right and that they should be able to get away with as reporting the likes of "National property values depressed" when in the likes of Christchurch property prices had fallen a mere 1% over the quarter. Its peoples lively hoods they are playing with, hell bent on looking after their own by creating sensationalism to sell advertising space.


  • #2
    Technically speaking, any drop is "depressed", so your 1% meets the criteria.

    There's nothing new about sensationalist media. It's just now it's affecting us.

    Yes, I think they should be allowed to do it. Much better than the alternative.

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    • #3
      The primary driver of property prices IMHO is fear and greed, putting aside obvious things like supply and demand.
      Most of the market is controlled by emotion.

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      • #4
        I'd be inclined to break it down into short term drivers and long term drivers. Short term there's huge media, speculation, current event etc impact, long term (decades) however it's a case of number of people versus available dwellings relative to income. How long you're intending to invest for is therefore going to be very pivotal in which factors matter to you.

        As a side note I'm with k1w1 - yes a sensationalist media can be frustrating but a non free press carries so very many downsides. I do feel NZ could desperately do with a broader range of mainstream media (starting with a decent national paper that isn't the herald) but that seems to be a pretty tough ask given the population base.

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        • #5
          Originally posted by k1w1 View Post
          Technically speaking, any drop is "depressed", so your 1% meets the criteria.

          There's nothing new about sensationalist media. It's just now it's affecting us.

          Yes, I think they should be allowed to do it. Much better than the alternative.
          Technically speaking a 1% drop is not grounds to announce a depressed market, the quarters can vary in terms of the mix of properties sold.

          A free press is no grounds for lies !

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          • #6
            The amount of "credit" helps dictate pricing in league with interest rates

            Take away the easy credit and the amount of properly capitalised players decreases

            Price precedes news, its just in NZ it takes a little longer for the ripples to get here eg: financial hickups in the northern hemisphere are just starting to arrive here...

            This has all been on the radar for around 4-5 years.

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            • #7
              Shock horror, I actually agree with Badger! :-)

              The REAL driver of property prices is the debt based fiat currency explosion.

              Supply / Demand, macro, micro drivers are all relevant but if there isn't an endless creation of worthless paper money backed by debt, the whole VALUE of anything is affected.

              Just my opinion guys, you can jump on it if you like. If there's one thing I do like it's education and being forced to evaluate my opinions.

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              • #8
                Originally posted by mals69 View Post
                Apart from the obvious like interest rates, immigration etc the media so often has a hand.
                Do not think it is right and that they should be able to get away with as reporting the likes of "National property values depressed" when in the likes of Christchurch property prices had fallen a mere 1% over the quarter. Its peoples lively hoods they are playing with, hell bent on looking after their own by creating sensationalism to sell advertising space.
                Didn't hear to many complaints when they were talking it up!

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                • #9
                  Originally posted by outspoken View Post
                  Shock horror, I actually agree with Badger! :-)

                  The REAL driver of property prices is the debt based fiat currency explosion.

                  Supply / Demand, macro, micro drivers are all relevant but if there isn't an endless creation of worthless paper money backed by debt, the whole VALUE of anything is affected.

                  Just my opinion guys, you can jump on it if you like. If there's one thing I do like it's education and being forced to evaluate my opinions.
                  I also agree with Badger, it's the credit cycle, and it was pushed to it's limit this round, hence where we find ourselves.
                  They'll hopefully fix it this time, out with BWII!
                  Find The Trend Whose Premise Is False - Then Bet Against It

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                  • #10
                    We all agree. So if they are forced to be more stringent with lending will we ever see the crazy frenzy of people with no ability to pay ever again?

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                    • #11
                      Short memories Paul, short memories. The answer is yes.
                      As corporates seek more profit, the credit departments will be pressured to find new ways to lend to people. So for the moment it seems doubtful but my Australian Business partner was a lending manager for St George in 1988 to 1990 and she has mentioned that back then lending was even harder to get approved.

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