Hi Kiwis,
I moved to your lovely country a few years ago and am very happy here.
One thing though that I'm amazed at and follow very closely is your property boom. Its amazing to watch a country fly down the path towards a crash seemingly with some kind of tunnel vision that nothing like this has happened overseas. Not only Ireland but the US and Japan have had very painful bubbles burst recently. All I read on here and other forums and in the media is that things are fantastic, prices are rising and everyone except the first home buyers are doing great and making a mint.
Prices in Auckland rising at 12% per year and nationally having jumped so much in the last five years it seems very similar to what happened in Dublin and Ireland from the late 90s to the peak in 2007. The banks are giving out loans to anyone with a few cents to their name, property investors are leveraging up to their eyeballs in some cases to build huge portfolios and the demand is far outstripping the stock of housing that has been built over the last few years.
You might argue that Ireland was a very different market and in some ways this is true, lax planning laws, low tax rates and the fact the market was overstocked with tons more houses then required. Plus an incredibly poorly regulated banking and mortgage broker industry compounded many issues. But the same underlying theme that prices are WAY overvalued in NZ is present.
So my questions are these...
Why doesnt anything see the burst coming over the horizon? Is it the white elephant in the room that nodoy wants to speak about until they've cashed in their investment property and made a killing?
Why do banks and brokers keep pushing more and more mortages to people with less and less deposit?
If prices continue at 12% per year in Auckland, does nobody think this is somewhat unsustainable and must come back down to a fair value?
What will people do when all the baby boomers and people retiring want to sell up and cash up for their retirement and suddenly the market is flooded with properties?
I just see no real assessment of the danger that is ahead, I see nothing but seminars on how to make money and people all convinced they can make a killing in property.
Or am I totally wrong to be worried and should just go down to the ANZ and grab $500K for a rental somewhere, shut up and get on with it.
Sean
I moved to your lovely country a few years ago and am very happy here.
One thing though that I'm amazed at and follow very closely is your property boom. Its amazing to watch a country fly down the path towards a crash seemingly with some kind of tunnel vision that nothing like this has happened overseas. Not only Ireland but the US and Japan have had very painful bubbles burst recently. All I read on here and other forums and in the media is that things are fantastic, prices are rising and everyone except the first home buyers are doing great and making a mint.
Prices in Auckland rising at 12% per year and nationally having jumped so much in the last five years it seems very similar to what happened in Dublin and Ireland from the late 90s to the peak in 2007. The banks are giving out loans to anyone with a few cents to their name, property investors are leveraging up to their eyeballs in some cases to build huge portfolios and the demand is far outstripping the stock of housing that has been built over the last few years.
You might argue that Ireland was a very different market and in some ways this is true, lax planning laws, low tax rates and the fact the market was overstocked with tons more houses then required. Plus an incredibly poorly regulated banking and mortgage broker industry compounded many issues. But the same underlying theme that prices are WAY overvalued in NZ is present.
So my questions are these...
Why doesnt anything see the burst coming over the horizon? Is it the white elephant in the room that nodoy wants to speak about until they've cashed in their investment property and made a killing?
Why do banks and brokers keep pushing more and more mortages to people with less and less deposit?
If prices continue at 12% per year in Auckland, does nobody think this is somewhat unsustainable and must come back down to a fair value?
What will people do when all the baby boomers and people retiring want to sell up and cash up for their retirement and suddenly the market is flooded with properties?
I just see no real assessment of the danger that is ahead, I see nothing but seminars on how to make money and people all convinced they can make a killing in property.
Or am I totally wrong to be worried and should just go down to the ANZ and grab $500K for a rental somewhere, shut up and get on with it.
Sean
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