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  1. #11


    Quote Originally Posted by tricky View Post
    Why would your thoughts be more credible than Tony's?
    Which figures would you dispute?
    Mmm, did I mention any of my thoughts to anyone. All I said that I felt a lot of it was hype and spin, without getting into specifics.

    Was reading the ANZ weekly business report for this week and last week.


    From This Week

    "Another large negative and it is likely that the recession will extend to its sixth quarter. Profit expectations should remain downbeat, and firms will continue to lack the confidence to employ and invest.
    We expect the difficulty in finding staff measures (both skilled and unskilled) to have improved, largely because firms are just not hiring at the moment. This portends of weaker wage outcomes over the coming year, and also a sharply higher unemployment rate. This is the biggest headwind for those advocating that the recent pick-up in housing market activity is set to be maintained."
    From last week report
    While there are some firming anecdotes of a recovering housing market rising lending rates and less job security will be quick to snuff that out.
    This is very much in line what Alan Bollard said in his interview to RadioNZ.

    My thoughts may not be more credible than he is, because he does have a economics degree, and I don't. However at this stage it is suffice to say that all other major economist disagree with his analysis.

    However I would like to ask him, if he feels so strongly that there is shortage of new buildings, then why doesn't BNZ gives more credit to the building sector.


    Also how is the economy is going to improve when business confidence is the lowest since the 1970s

    Last edited by IndianKiwi; 08-04-2009 at 01:46 PM.

  2. #12
    Join Date
    Jan 2008
    North Shore, Auckland


    Quote Originally Posted by IndianKiwi View Post

    My thoughts may not be more credible than he is, because he does have a economics degree, and I don't. However at this stage it is suffice to say that all other major economist disagree with his analysis.
    No one disagrees there's a increasing fundamental "fair weather" shortage of housing stock.

    But he's predicting that "fair weather" is going to resume before the end of this year. And not just locally...

    I think that's the single root of all rubbish in that article.

  3. #13


    Quote Originally Posted by IndianKiwi View Post

    The article is written by Tony Alexander, BNZ Chief Economist.

    Come on we know why he wrote it donít we????

    Do your research... find out who the Bilderburgers are. Last year Jim Mars said exactly what was going to happen and it did exactly what he said or rather what he was told by TBG. This year they are going to ramp the market back up until around September then crash the lot and buy it all up!

    You read it here first.... get into Gold and Silver coins... not paper spot or hedge per oz... buy gold coins because you will have an historical value and you will have something tangible not a piece of paper!

    You know in your heart what is going to keep happening with the property market anyone who doesnít deserves everything that happens to them because the signs are very clear!

  4. #14
    Join Date
    Jun 2008
    Auckland/Tauranga/Gold Coast


    I doubt you can claim to be the first gold and silver bug here east.

    There are some gold guru's providing lots of good gold info on other threads.

    Austro might be able to tell me when the first ever gold coin was created. That way we would know exactly when the term was first used " get them here, Gold coins... the way of the future "

  5. #15
    Join Date
    Sep 2008


    Action on the home front

    4:00AM Sunday Apr 12, 2009
    Andrea Milner

    Home buyers - including expats with an eye for a bargain - have returned to the market in strength, hunting both high end and investment property.
    International traffic to Trade Me Property surged 21 per cent last month. Brendon Skipper, head of Trade Me Property, says expats are "looking for a job, looking for a car and looking for a property" on the site.
    Megan Jaffe, owner of the Ray White franchise in Auckland's swanky Remuera, says with expats buying, sales have picked up on top-end houses.
    Ray White's March sales figures rebounded strongly, soaring 44.1 per cent. Chief executive Carey Smith says the hottest spots are Northland, Auckland, and the upper South Island; especially Christchurch, where investor activity is humming in the under $300,000 segment.
    Babette Newman, Bayleys' Wellington residential manager, says there's a "huge increase" in attendees at open homes and multiple offers being made on properties in the capital too - particularly those over $800,000.
    Typical responses in BNZ's latest confidence survey, which compiles feedback from around the country, included: "Property investment is going crazy ... Have had more than 100 people through most properties in the first weekend of open homes ... Everything is booming under $400,000 with homes being snapped up in just a few days from listing and multi-offers across many properties."
    For the past four weeks, Barfoot & Thompson has averaged a 65-70 per cent auction clearance rate. Six months ago, this had reached an all-time low of 30-35 per cent.
    Director Peter Thompson says: "The auction room in the city on Wednesdays has witnessed activity never seen before in these premises - standing room only spilling out into the foyer," and only a small portion of these are mortgagee auctions.
    Ray White's Smith reports a 68 per cent auction clearance rate - again a doubling from last year.
    Residential real estate is once more "so alive," Jaffe says. "The investors are back; open homes are full, listings are short - and there's buyer competition." Alistair Helm, chief executive of realestate.co.nz, confirms new listings in March fell 19 per cent compared to a year earlier.
    The local housing market is benefiting from tough economic conditions abroad, says John Wills of Custom Residential.
    Broker Charlotte Lockhart of Mike Pero Mortgages, who's arranging finance for expat buyers weekly - mostly those living in the UK - doesn't think expats feel their money is safe there.
    Looking for a place to put it, they're settling for a bolthole back home while the exchange rate is favourable. Realestate.co.nz's Helm reports an 11 per cent increase in website visitors from the UK viewing rental properties.
    Wills says Custom Residential's website has seen a "massive increase" in offshore inquiry about properties in the hotspot of greater Ponsonby. Total traffic volume more than doubled during February and March.
    "Kiwi professionals are returning home and having to compete with existing local buyers for the best property," he says, with the "executive" home buyer demographic being "incredibly active" on the greater Ponsonby house-hunting circuit.
    Wills says of the surge in active buyers: "It feels a bit like going 'back to the future', with open home numbers and a buyer pool similar to what we saw in 2005 and 2006."
    Competition for good property is "one step away from being described as fierce," he says - but heading in that direction. In the meantime, he says most properties listed with his agency become the subject of multi-offer negotiations. For one recently listed property, the first open homes were held on Saturday and Sunday of the same weekend, and four offers were made on the Monday.
    An agreement was reached about 9.30pm that evening. "This is quite typical of what we are experiencing out there at the moment," says Wills, reminiscent of the activity peak during the last boom.
    The question is whether what he calls the market's "serious momentum" will continue through winter.
    Smith says it can't be underestimated that "sales create sales". The favoured two-year mortgage interest rate remains 2 per cent below its long-term average and the one-year rate almost 3 per cent below average.
    The rate of new houses being built has hit a 65-year low, and market watchers agree if immigration remains solid and interest rates stay low the market will continue trading at more normal levels.

    Offshore Kiwis quids in
    Expat Kiwis Michelle Bradley, an accountant, and her builder fiance Greg Wdowikowski, both in their early 30s, were living and working in London when they decided to buy their first investment property in 2007.
    "We saved our deposit and bought a rental property in Hamilton, and it has great rental return of $300 a week."
    Despite the fact they "bought off the internet" without viewing the property, they got a LIM and other property reports beforehand.
    They enlisted help from Auckland-based broker Jodi Cottle of Sable Mortgages, who runs regular seminars in the UK for expat buyers looking for property in New Zealand. Seminar numbers are limited to 200 - and they're always full. Interest in the seminars is so strong, Cottle doesn't need to advertise them.
    With the pound's favourable exchange rate, Bradley says it was "so much easier for us to do this from Britain than if we were living at home". A year ago, Bradley won a green card in the US ballot and the couple relocated to New York.
    Searching New Zealand websites for new listings daily, they're about to buy a more expensive "four-bedroom, executive-style home" on Auckland's North Shore.
    "What makes it so enticing is the quality of home that we can buy there on the US dollar, and the lifestyle we may eventually come home to."

  6. #16
    Join Date
    Sep 2008


    Even the doomsayer is changing his mind. Figured out its cheaper to own than rent. Forgot to include increasing rents in his calculations though. Tells all the ladies they should now go and have babies; like they haven't already figured that out. More the better.

    Bernard Hickey: Time is right to buy
    4:00AM Sunday Apr 12, 2009
    Bernard Hickey

    For years, the common refrain from potential home buyers has been that it's cheaper to rent than buy.

    The sharp rise in house prices from 2003 to the end of 2007, combined with a rise in the two-year fixed mortgage rate from 6 per cent to almost 10 per cent over the same period, seemed to be the death knell for many dreams of home ownership.

    But that picture has changed dramatically in the past year as interest rates have fallen, house prices have fallen, rents have remained broadly stable and after-tax pay has improved because of wage growth and tax cuts.

    Analysis by interest.co.nz shows it's now cheaper for a typical first home buyer's household to buy than to rent, when rates, maintenance and insurance costs are excluded. It also excludes the opportunity cost of interest earned on a deposit amount instead sunk into a property.

    Measuring these costs is important, but we haven't yet found typical measures given the variances in rates bills, insurance and maintenance depending on the type and location of property.

    But the picture is clear. The major cost of home ownership - interest costs on a mortgage of 80 per cent of a first-quartile home (ie the midpoint between the lowest-priced houses and the median house price) were around 1.5 per cent less than the rent on a similar-sized house in January and February.

    This is the first time since we started collecting the data at the beginning of 2006 that it's cheaper to buy than to rent and is a major improvement on the 10.3 per cent premium for buying over renting in November 2007.

    We're assuming this first home buyer's household is made up of two 25 to 29-year-olds, median salary earners considering moving into a median-priced three-bedroom rental house rather than buying a first-quartile priced house. This is the "classic" couple at that point where they're considering starting a family.

    This is where the dream of home ownership is most potent and we think the decision-making point is most concentrated. We've heard repeatedly in recent years how couples in their mid- to late-20s have come to this point and decided to leave New Zealand because there was no hope they could buy a home and start a family.

    I'm sure it was one of the driving factors in the exodus of young New Zealanders (and their parents) to Australia in the past three years.
    ( No, I don't think so. They left because of Govt. and higher wages unlike in the 90's when the went because they could buy a house that was better and cheaper. You can't do that in Aussie now.)

    Our calculations show this couple now earns $1307.87 after tax each week, up from $1221.13 a week in November 2007, when house prices peaked.

    Then, the mortgage payments on an 80 per cent mortgage for a first-quartile home were 34.9 per cent of take-home pay. The rent on a three-bedroom home soaked up 24.6 per cent of after-tax pay. So the advantage of renting was essentially worth 10.1 per cent of net pay.

    Now that gap has narrowed to the point in February where it has become negative for the first time. It now takes 23.7 per cent of after-tax pay to afford the rent on a three-bedroom house, while it takes 22.3 per cent to afford the mortgage.

    Obviously, the costs of maintenance, insurance and rates will mean it is still more expensive to own a home, but it is now within that margin of error where the heart can conquer the head.

    Another way of describing it is to say the footloose and fancy-free husband no longer has any good excuses to put off the nesting instincts of the wife. In other words, it's time for another baby boom. (Complaints please to [email protected]).( hasn't noticed that already happening. duh)
    So what might this all mean for the property market and New Zealand's demographics?

    For years, real estate agents have told first home buyers that rent was "wasted" money that could be put to better use in "compulsory saving" on the mortgage. Of course, this isn't strictly true and pointing out the the obvious extra expense of a home loan made for an easy rebuff. Not for much longer.

    But it may not contribute to a rebound in house prices. Banks are now tougher with their lending criteria, particularly for those wanting to borrow more than 80 per cent of the value of a home. The lure in days gone by of easy capital gains has also evaporated, discouraging the sort of highly leveraged first home buying seen through 2005, 2006 and 2007. ( Really!!!)

    Sales volumes, however, are already picking up as first home buyers dip their toes back in the real estate market to snap up bargains from distressed sellers.

    This shift in the rent-versus-buy calculation is also great news for New Zealand's population trends, discouraging migration of New Zealand-born citizens and encouraging family formation, with all the social benefits that entails.

    It all depends on house prices continuing to fall,(eh?), interest rates staying low and incomes continuing to rise. This analysis also excludes the effects of rising unemployment. That may be the variable that renders this structural change in our economy redundant for now. ( and rentals rising!!)

    * Bernard Hickey is the managing editor of www.interest.co.nz, a website for investors and borrowers wanting free and independent news and information about interest rates, banks, finance companies and the economy.
    Last edited by Viking; 12-04-2009 at 09:34 AM.

  7. #17
    Join Date
    Jun 2005


    You read it here first.... get into Gold and Silver coins... not paper spot or hedge per oz... buy gold coins because you will have an historical value and you will have something tangible not a piece of paper!
    Err - no, actually I read it first in about 1983, when I first took a slight interest in such things!

    And as well as not having a piece of paper, you'll not have a 'tangible asset' that can be used as security or one that provides any income. Come 'the revolution' (as we used to say!), it'll be easier to swap a days labour for food that a gold coin, IMHO.

    Gold has no intrinsic worth, it's value is just as subject to the pro- and anti- spin merchants who variously claim that gold will crash to $500 per oz or rise to $2,000+ as house prices can be at volatile times like these.

    Which way it goes will depend, really, on what you can buy with a $1 - if the US $ collapses in the face of a slow but sure Chinese sell off, then of course Gold will rise in US$ terms. The question for NZers is whether the NZ$ will go with the US$ or maintain its value relative to the selection of other major trading currencies (AU$, RMB, Yen, Euro etc) that don't become a basket case.

    Whilst the US$ remains the world's de-facto reserve currency, the price of Gold in US$ will remain important, but if it loses that status, as is being discussed in some quarters, then who (outside of the US) will care about the price of the yellow metal in what will become just another national currency?


  8. #18
    Join Date
    May 2005


    "" get them here, Gold coins... the way of the future ""

    I just love that. Laughed a lot. I pictured Monty Python's Eric Idle.
    You could be right in your suggestion that gold won't be all it is expected to be. But then, it might go through the roof.
    Either way I'd like to place bets.
    I merely enjoyed the timely allusion that you made.

  9. #19
    Join Date
    Apr 2008


    So is Bernard Hickey sticking to his prediction of a 30% drop in RE prices by the end of 2009 ... or not?

    What an idiot.

  10. #20
    Join Date
    Sep 2008


    Hmmm. Well I just checked Trademe as I do and the Tauranga listings have fallen by 150 from the peak a few months ago. Lot of newly dated listings in the area i looked at so something is going on out there. Consistent with what the agents tell me.
    We are looking forward to a good migration season over the next few years. Looks like the ever hopeful Aucklander's are going to get the egotistical Sir John Banks as Lord mayor. (why else did the other John bring back Titular honours?).
    Now that should encourage a lot of the jaffa's to move South (or North) as they feel even more disenfranchised.
    Lesson, buy Tauranga, Coromandel,North of Rodney even Hamilton.


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