"Now is the Time To Buy"

[IndianKiwi]

stuff.co.nz/business/analysis/2321195/Time-to-buy

In summary

It's good to buy because

-Expat coming home and net migration is up
-Low Interest Rate
-Shortage of quality houses
-No new construction
-Sales up in Auckland
-World Economy would turn better
-BNZ Survey says that business confidence has lifted

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

Comments????

My BS meter was jumping all over the place, but like to hear to see if they think the same.

Please do link articles which rebuts his points

[markw1]

Wouldnt take too much info from tony alexander. Somewhat agree on the rest of the points made however credit supply/crunch/markets are not bein taken into consideration.

[muppet]

Full article.

Time to buy

By TONY ALEXANDER - Waikato Times Last updated 05:00 08/04/2009

BUY NOW: The best housing bargains will have been well and truly snapped up by the middle of the year.
OPINION Regular readers of this column or my Weekly Overview publication should be aware that my view on the NZ housing market has been quite at odds with the generally very pessimistic views expressed by other commentators – not only for the past year but also since the June quarter of 2004.





Many people have been gleefully predicting 40 percent falls in house prices believing that events have been conspiring to produce greater house price declines here than in even the United States.
Over there they have “only” fallen 29 percent in spite of massive over-building, huge excess lending and borrowing when mortgage rates when down near 2 percent, and now the biggest credit crunch in the US since the 1930s Great depression when the Federal Reserve shrank the US money supply about 30 percent.
Here in New Zealand the fundamentals have never added up to large declines in average house prices and it appears there are literally tens of thousands of people who share this less than apocalyptic view.
For a start we have accelerating population growth courtesy of rising net migration inflows.
When times get tough overseas ex-pats come home, foreigners shift here, and fewer Kiwis leave to seek their fortunes elsewhere.
Between June 2001 and June 2002 our net flow went from -9,000 to +33,000.
So far we have gone from +3,500 in November to +6,200 in February and a total between 15,000 and 30,000 within a year seems an easy call.
We have low interest rates by NZ standards with the two year fixed rate around 1.6 percent below its average for the past five years and our one year rate at 5.49 percent some 2.8 percent below average.
We have a fundamental shortage of accommodation as evidenced by official efforts in the past two years to find ways to speed up construction – the Commerce Committee investigation.
We now however have collapsing construction with the number of consents issued at the lowest levels in perhaps half a century near 12,500 per annum.
We need about 24,000 a year just to meet population growth – let alone house above average migration-driven growth.
The most up to date data show the housing market – let’s say stabilising rather than rising.
Barfoot and Thompson data for Auckland show their sales ahead 46 percent in March from a year ago.
Our own monthly survey has shown a sharp turnaround in real estate comments over the past two months.
Anecdotes bespeak of a rush of investor enquiries, multiple bidders on properties, and shortages of listings appearing in some areas.
There is undoubtedly a short term bounce effect in the data caused by people rushing purchases to take advantage of low interest rates and because they have put their lives on holds too long and simply want to move on.
That is why we think it is only appropriate to speak in terms of the market stabilising rather than rising.
But it will be interesting to see how prices go this year as an existing housing shortage combined with the worst construction levels in living memory for practically all builders runs up against accelerating population growth. You do the math.
Speaking of maths, investors are increasingly finding they can make their properties cash flow positive.
Imagine what the numbers will look like as the accommodation shortage worsens and rents start rising.
After all, even the unemployed need somewhere to live.
So I maintain the position written here at some stage last year.
If I were looking to make a canny purchase in the housing market – whether as an investor or owner-occupier – I would want to do it before the middle of this year.
This is not to say the listings will completely dry up, just that the best bargains will have been well and truly snapped up by then.
Plus, going by the way things are turning overseas, sentiment about the world and NZ economies is likely to be a lot better.
In fact our latest monthly business survey has found a firm lift in sentiment over the past month – as has consumer confidence measured in the Colmar Brunton poll just out.
*Tony Alexander is BNZ’s chief economist.

http://www.stuff.co.nz/business/analysis/2321195/Time-to-buy

[67910241]

Tony Alexander, MREINZ.

I am now convinced he's one of the top staight faced bull artists this country has.

Actually, I am now badmouthing MREINZ spin artists, they are well grounded realists compared to this clown.

[CJ]

It's good to buy because

-Expat coming home and net migration is up
-Low Interest Rate
-Shortage of quality houses
-No new construction
-Sales up in Auckland
-World Economy would turn better
-BNZ Survey says that business confidence has lifted

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

Are expats coming home and are they finding jobs?

Agree with low interest rates (below average) and new construction is down.

The rest are nothings in my opinion.

[tricky]

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

Comments????

My BS meter was jumping all over the place, but like to hear to see if they think the same.

Please do link articles which rebuts his points

Why would your thoughts be more credible than Tony's?
Which figures would you dispute?

[67910241]

Are expats coming home and are they finding jobs?

Agree with low interest rates (below average) and new construction is down.

The rest are nothings in my opinion.

Thousands of expat near bankrupts returning to NZ to live with their mom and pop.

And 45,000 pa population growth, of which 20,000 is in South Auckland, necessitating 24,000 new dwellings?

I want to have some of what he's taking.

[67910241]

Why would your thoughts be more credible than Tony's?
Which figures would you dispute?

"Global sentiment improving."

"24,000 dwellings per annum needed."

"Immigration levels rising"

"Even unemployed needing accommodation" (The starving of Ethiopia and Sudan also need decent food, but starvation demostrates needing it doesn't equal getting it)

Pretty much everything he said.

[67910241]

"Over there they have “only” fallen 29 percent in spite of massive over-building, huge excess lending and borrowing when mortgage rates when down near 2 percent, and now the biggest credit crunch in the US since the 1930s Great depression when the Federal Reserve shrank the US money supply about 30 percent."

What a load of absolute crap. The likes of this idiot are giving thousands of decent economists a bad name.

Overbuilding in the States was limited to Southwest and the South. That's where the prices fell far more than 29% he's talking about.

There was no union-wide overbuilding in the States.

He should have known this.

[tricky]

Come on, let it flow, 679....
You'll feel better.

[IndianKiwi]

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.

anz.co.nz/about/media/newslibrary.asp?anz_market_focus

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.

interest.co.nz/ratesblog/index.php/2009/04/08/opinion-why-the-building-sector-needs-government-policy-help/#more-3208

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

propertytalk.com/forum/showthread.php?t=20856

[67910241]

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.

[east147]

stuff.co.nz/business/analysis/2321195/Time-

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

Comments????

Come on we know why he wrote it don’t 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 doesn’t deserves everything that happens to them because the signs are very clear!

[tpr2]

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 "

[Viking]

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."