Thoughts on an 'Auckland Property Shortage'

[SwissKiwi]

All,

Simple Question:


'If there is a shortage of property in Auckland - right now,
Why is this not triggering a positive price response - right now?'

[WGN ex-property manager]

Because the people who want to buy right now can't get finance right now.

Once the banks loosen up on the credit criteria.... watch this space.

[Hec]

Spot on Robin.
was out on the hunt today in Auckland. more properties about (in all categories and areas) then you can poke a tick at.

[SwissKiwi]

Right, so we are saying that the missing ingredient is credit, once the credit tap

starts flowing more freely - the party begins once more?

[WGN ex-property manager]

Exactly

[Stevegoodey]

2700 new homes going up in Red Beach north of Auckland, that should make some difference.

[Keithw]

Have you priced them Steve?
would be surprised if there was much below 500k
not exactly first home territory & unlikely to be any cash +v amongst them.

So that puts them into second home owner occupier territory.

Will the flowdown to first home buyers really happen, since the seller is going to want top dollar on their 300k place, in order to upgrade to brand new 500k place, & in this market the buyers dont want to pay top dollar & the banks wont fund 300k
I think the stalemate will continue for a while.

[Rosco]

there was a NZ Herald article a while back that Auckland was growing by 50 people per day, and needed 21 new houses per day.

If this is correct, then 2700 new houses will only take care of 129 days of growth.

It will obviously have an impact, but if this is the only major new housing project, then Auckland should still have a shortage.

Plus obviously the properties will take some time to sell, so in the short time will make little difference.

Ross

[Jumpin]

Because the people who want to buy right now can't get finance right now.

Once the banks loosen up on the credit criteria.... watch this space.

So in other words: There isn't a property shortage in Auckland right now.

And what's more, the banks won't be loosening their credit criteria anytime soon.

[WGN ex-property manager]

So in other words: There isn't a property shortage in Auckland right now.

There is a shortage right now, but it's in the form of "pent up demand"... lot of frustrated wannabe buyers living in places they don't like, wondering just how many pieces of paper the next bank will want to see before saying no.

And what's more, the banks won't be loosening their credit criteria anytime soon.

Correct. What we're talking about here is a medium term driver for the beginning of the next boom.... but don't hold your breath

[fatfishandchipman]

Because the people who want to buy right now can't get finance right now.

...then there is no property shortage.

[mortgage broker]

There could still be a shortage for renters

[SwissKiwi]

Because the people who want to buy right now can't get finance right now

So in this case you are saying there is a credit shortage, rather than an actual housing shortage?

[Bob Kane]

Shortage and what's going to happen

1. There are more people than houses in Auckland.
2. There is a shortage of credit.
What's going to happen?
There are three items: people, houses and credit.
1. If people disappear, the shortage will go away.
2. If more houses are built, the shortage will go away.
3. If more credit becomes available, prices will rise and more houses will be built (and the shortage will go away).
So it comes down to a two-horse race - either people will disappear or credit will become more available (building houses depends on credit being available so it's not a three-horse race).
Which will happen first? The shortage will continue until we have a winner.
I'm picking people won't disappear so more credit being available will solve the housing shortage.

[Jumpin]

Well I'm picking more (cheap) apartments will be built, removing any shortage, real or imaginary.