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Houses up by 24% in next 3 years!

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  • Houses up by 24% in next 3 years!

    Well here's a bold prediction....I wonder what our local analysts think?

    House prices in New Zealand will rise by 24% over the next three years due to low interest rates and a shortage of new housing, Infometrics has predicted in a report prepared for mortgage insurer QBE LMI.
    source

    cheers,

    Donna
    SEARCH PropertyTalk, About PropertyTalk

    BusinessBlogs - the best business articles are found here

  • #2
    HAHAHHAHAHHAHAHHAHAHHAHAHHAHA
    Lets just work on a recovery to 2007/2008 levels first.

    Comment


    • #3
      Isn't Infometrics Gareth Morgan's thing. Didn't he say housing was stuffed?
      Squadly dinky do!

      Comment


      • #4
        Gareth is a Director What a laugh! Too many contradictions in the market to take any seriously. I suppose another way of looking at is - every which way is now on the list of predictions so whatever your opinion you'll find some analyst who supports it.

        Cheers,

        Donna
        SEARCH PropertyTalk, About PropertyTalk

        BusinessBlogs - the best business articles are found here

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        • #5
          Has Bernard Hickey started working for Infometrics?

          Paul.

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          • #6
            Where's that "predictions gone wild thread'......
            DFTBA

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            • #7
              Well I'm going to be bold and state that this prediction will be right, or wrong, depending on the outcome of the next three years. There I've said it black and white, I hope it dosen't come back to haunt me if I'm wrong.

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              • #8
                Interesting. They acknowledge that they are currently overvalued but expect that overvalued to rise.

                Basically reduced supply (less building being down) and more demand (low interest rates and migration).

                These are the same reason Tony Alexander has stated to support his theory that prices wont fall as far as other shave predicted. He just wasn't silly enough to say they will rise.

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                • #9
                  A rush to judgment?

                  This report may be more accurate than previously imagined. I am in the market on a daily basis and can confirm that there is a strong snowballing of demand for conventional housing which could lead to a second bubble forming.

                  My clients are telling me the same story of multiple offers, frustrating auctions and rapid sales.

                  Low interest rates encourage people to seek alternative returns and property is one of the most popular.

                  The huge losses in the financial sector, where money has been lost for ever, also encourages people to safer havens.

                  Just ask the people who invested in Bridgecorp, Hanover, ING and the like, what they would invest in today if only they had a second chance.
                  OllyN [email protected]
                  Independent Property Consultant
                  Residential and Commercial Solutions

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                  • #10
                    Olly.
                    Isn't what we are seeing now merely a dead cat bounce?
                    It has occured in previous history too.

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                    • #11
                      "Dead cat bounces" usually occur in rapidly changing markets such a futures or shares. Real estate, is by its nature, much slower and changes take a long time to come through. I haven't yet seen a 'dead cat bounce" in the property market. The amount of cheap money being pumped into world economies could create a tsunami of inflation which may fuel another bubble. In other words all options are on the table.
                      OllyN [email protected]
                      Independent Property Consultant
                      Residential and Commercial Solutions

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                      • #12
                        OK.
                        Although i fail to see any real economic drivers in the article that would support a price spike upwards. Seems more emotional the resons they outline.

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                        • #13
                          economic drivers are mentioned: low interest rates, shortage of housing, and net immigration. I would also add a understandable mistrust in financial institutions. These are facts and not emotion.
                          OllyN [email protected]
                          Independent Property Consultant
                          Residential and Commercial Solutions

                          Comment


                          • #14
                            Originally posted by OllyN View Post
                            economic drivers are mentioned: low interest rates, shortage of housing, and net immigration. I would also add a understandable mistrust in financial institutions. These are facts and not emotion.
                            interest rates and immigration I would agree with yes Olly they would have an impact.
                            But housing shortage would not be an economic driver instead merely a outcome of the drivers on society.

                            Comment


                            • #15
                              Originally posted by CJ View Post
                              Interesting. They acknowledge that they are currently overvalued but expect that overvalued to rise.
                              They [Infometics] didn't say that.

                              What they did say was:

                              "Inflation adjusted house prices are currently an estimated 15% above their long-term trend line (down from 36% in mid-2007), but could climb back towards 30% above the long term trend line by the end of the forecast period"

                              It was the journalist who said "prices could be overvalued by near to 30% by June 2012".

                              Just because 99% of those who read that article won't pick that up, doesn't mean the rest of us shouldn't be in that 1% that can understand the difference between a "long term trend line" (to which Infometrics does refer) and the concept of "value" [a fair price] in real estate (to which Infometrics does not appear to refer).
                              Last edited by Mark_B; 11-08-2009, 08:21 PM.
                              Comments may not be relevant to individual circumstances. Before making any investment, financial or taxation decision you should consult a professional adviser.

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