Housing slowdown more obvious

[cube]

Reported on YahooXtra

The country's housing slowdown is becoming more obvious, according to the latest BNZ Markets Outlook.

Real Estate figures for August are likely to be out later this week, and the BNZ says they are crucial. If sales have continued to slow down; house prices stay static and days to sell come up around 30, the bank says a housing slowdown will be firmly underway.

It says the fact that the housing market is at long last starting to cool off would make many people a little edgy. It has the potential to take the steam out of the economy and expose many people who are in an over-leveraged position.

The BNZ says New Zealand's economy would seem to be on the cusp of a long-overdue rebalancing.

[Commercial Dan]

This has been bloody obvious for weeks now, time to sit back and take caution.

[casacamo]

Isn't there a general slow down in winter, when it cold & wet outside who wants to be marketing (or buying) a house.
It usually picks up in Sept - October. We are only seeing the July - August statistics at present.

[Commercial Dan]

This is the first winter slowdown since 2001, things have definitely changed.

[Dean@Massiveaction]

You wouldn't want to bet the farm on it but looking at the stats below it is fair to say that as a general trend over time sales volumes reduce and days to sell increase over winter months.

[whitt]

Show me the slow down guys!!!
June, July 2007 number of days to sell figures are better than in June, July 2005 & 2006.

So looking at the figures you have given us Pooomba I honestly cant see the slow down everyone is talking about.


The figures show property is selling this winter faster than in the previous 2 years. Actually nearly as fast as 2003 when the boom was going full steam.

Slow down, Cant see it in number of day figures sorry.

Are people trying to talk up a slow down when the stats don't actually show this is occurring?

[Dean@Massiveaction]

I was referring to the long term Whitt/ There is no argument that there hasn't been a slow down in the last 5 or 6 years.

[Bob Da Builder]

Talked to agents on the Northshore, Auckland re housing this week, Barfoots and LJ Hooker. Both noted a huge slow down in sales, with some agents really suffering.

1 agent noted that a lot of investors were dumping properties.

[Bob Da Builder]

To keep my self out of trouble, have been looking at interest rates (Australia) 1980-1992 durring the last big crash. Between Jan 88 and Jan 90, interest rates rose from 11.7 - 18.4%, with overdraft rates even higher up to 25%.

This rise represents an increase of over 50%.

My 50 cents worth
If rates are raised enough and held there long enough they will break any boom.
Secondly High rates will break alot of other things to - eg business, jobs, homebuyers tenant demand ect, even builders.

My Guess
We have had an interest rate rise of APPROX 7.5 to 9% say, which represents about a 20% rise. If interest rates went up to 11-12% (before inflation kicks in big time) then I believe the shit will hit the fan.

Untill then I would just predict a slow down

Big guess.

Bob Da Builder

[Gerrard]

1 agent noted that a lot of investors were dumping properties.

Same story from a property manager I know.

So why are investors selling up now? Time to take the cash and run?

[poormastery]

I could, of course, be wrong...

So why are investors selling up now? Time to take the cash and run?

My guess would be that many investors could be selling due to cash flow problems, as a result of higher interest rates etc...

Better than the bank selling the property for under you, I suppose...

Regards,
*poormastery*

[tricky]

So why are investors selling up now? Time to take the cash and run?

I think a lot of new investors who have followed the herd into this latest property boom will start bailing out now. Their hearts aren't really in property and they are easily scared. Their departure is expected.

[Glenn]

Well here where it is still sunny, despite consistant weather forcasts for rain all week, I have only two properties currently on the market out of my large management portfolio.
One is the investors own lifestyle home. He has gone to Australia. He is keeping the rest of his rental stock. The other is owned by B the Builder. He has slowely been reducing his residential portfolio and investing in commercial syndicates.
So no movement down here (yet). I never the less am wondering if the collapse of local LDC finance will trigger some selling. A few people I know who have money in "good" local finance companies are looking a bit twitchy.

[Edinburgh]

I think there is some nervousness in the market, some caution but I also think that unless the US goes into recession things won't totally unravel here.

If we get into say November with the US coping with its subprime fallout and few or no further finance companies falling over here, the fine weather, job security and dairy payouts will see the market ticking along.

I also wouldn't be surprised to see an uplift in particularly UK immigrants. They have had a very buoyant property market, some of them have huge equity and this will set them up nicely in NZ. They have just had a dreadful summer and I think quite a lot of eyes will be turning southwards as our summer approaches, with Oz and NZ benefitting.

But, hey, I could be totally wrong. Its just what I think.

[muppet]

Hi Guys

Edinburgh said:

If we get into say November with the US coping with its subprime fallout

I think "we ain't seen nothing yet." There is over a trillion dollars tied up in the subprime market and all of that will have to be refinanced at some stage at the rate of many billions per month.

Oh no not more English immigrants.

Regards