High house prices – a new culprit has been found

[klauster]

See “Low rates heating up house prices” by Anne Gibson in NZHERALD
Heating up the market sentiment, this time not investors, no – the low interest rates are the culprit for house prices. Why not the economy in Greek or the seller across the road who sold for 1 million?
Valuating the housing market on single symptoms not on the entire economy - how bad can journalism be, but still accepted?

[TheLiberalLeft]

Her mate probably commented that they're about to buy "cos the rates are low innit".

[roseneath_rat]

It is an obvious stimulus to current house prices, how could it not be? It is a direct influence on anyone borrowing money in order to facilitate the deal. Much as I dislike much of the nanny-reporting on Granny-Herald especially on financial issues, it is very definitely a factor. Either that or the entire basis of monetary policy tools used by the Reserve Bank are rubbish?

[eri]

it's so UNFAIR

Cognitive dissonance

the discomfort people feel when they realize

they can't have their cake, low house prices

and eat it too, low interest

... a discomfort caused by holding conflicting cognitions (e.g., ideas, beliefs, values, emotional reactions) simultaneously. In a state of dissonance, people may feel surprise, dread, guilt, anger, or embarrassment

[roseneath_rat]

Heh, ain't that the truth Eri.

[Austrokiwi]

Well I agree low interest rates are a driver but I do take the issue with the idea its a new culprit. A few years ago the reserve bank was complaining they couldn't cool the housing market because of the low interest rates over seas. Those low foreign interest rates were enabling cheap rates in New Zealand almost independent of the official OCR. The resource management act and run away council charges for new developments are other significant contributors to high house prices.

[Viking]

The real culprit remains unsaid.

tada.
You cannot in many places shift a good second-hand house onto a subdivision any more than you can a factory-built transportable. Transportables are without a doubt the cheapest way to increase housing and the quickest. The quality nowadays in quite high from most suppliers.

So why is this so. Well the snobs have taken over, Developers rule and place covenants on the sections.
Covenants that force people to build near million dollar dreams.

And there is the problem.
Build subdivisions without covenants and with needing garages for cars that sit out all day anyway and all the trimmings and the cost will plummet. First home buyers will be able to get into a house. Just like many did in the seventies.
Despite the latest rubbish report that there has not been enough money for the job it's simply not true. The prevention of low-cost housing is the problem.