Comments on: The New Zealand real estate market http://www.26econ.com/the-new-zealand-real-estate-market/ Online economics Fri, 21 Nov 2008 00:43:49 +0000 http://wordpress.org/?v=2.3.2 By: Matthew http://www.26econ.com/the-new-zealand-real-estate-market/#comment-7218 Matthew Fri, 16 May 2008 11:37:16 +0000 http://www.26econ.com/the-new-zealand-real-estate-market/#comment-7218 Andrew, I have to disagree with your statement "No one likes to hear that the market has topped out". As a first home buyer, I personally DO like to hear it. In fact, in a recent BBC survey, 28% of people surveyed wanted house prices to fall, compared to only 22% who wanted them to rise. http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=565888&in_page_id=1770 Andrew, I have to disagree with your statement “No one likes to hear that the market has topped out”. As a first home buyer, I personally DO like to hear it.

In fact, in a recent BBC survey, 28% of people surveyed wanted house prices to fall, compared to only 22% who wanted them to rise.

http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=565888&in_page_id=1770

]]> By: Andrew http://www.26econ.com/the-new-zealand-real-estate-market/#comment-2253 Andrew Sat, 22 Dec 2007 18:37:51 +0000 http://www.26econ.com/the-new-zealand-real-estate-market/#comment-2253 I would say that if you are speculating in real estate, have a adjustable rate that you cannot afford or do not have the intention of living in your house for the next 10-20 years and have the opportunity to sell your house and realize a profit, do it while the market is **still** in transition. There is absolutely a connection to interest rates and the real estate market. Inflation is becoming a real issue globally. Unfortunately this is not necessarily due to a hot economy but rather to commodity prices such as oil, wheat, steel, etc. The effect of this kind of inflation is one that slows an already slowing economy. It is quite a tightrope for policy makers to walk. On one side is recession. On the other is inflation. China and India are transitioning from an export driven economy to, in the future, an economy that caters to its own people. When this happens even more resources will flow to their hunger economies. Thus, increasing prices globally. While the events that have been happening in the US and UK real estate markets is very far away, these days the money of the world is mingled. The credit crisis affecting the banks of the world are an example of how local problems become global problems. And having visited NZ in September, I was amazed at the number of For Sale signs. It was dizzying. Everyone is trying to make money in real estate. No one likes to hear that the market has topped out. Especially if you own a home. However, folks in the US didn't listen to the obvious signs. It took about one year from the first signs of softness until the present situation. And for those that don't own a quality home in a desirable location where there are jobs are wondering what their houses are really worth. I would say that if you are speculating in real estate, have a adjustable rate that you cannot afford or do not have the intention of living in your house for the next 10-20 years and have the opportunity to sell your house and realize a profit, do it while the market is **still** in transition.

There is absolutely a connection to interest rates and the real estate market. Inflation is becoming a real issue globally. Unfortunately this is not necessarily due to a hot economy but rather to commodity prices such as oil, wheat, steel, etc. The effect of this kind of inflation is one that slows an already slowing economy. It is quite a tightrope for policy makers to walk. On one side is recession. On the other is inflation.

China and India are transitioning from an export driven economy to, in the future, an economy that caters to its own people. When this happens even more resources will flow to their hunger economies. Thus, increasing prices globally.

While the events that have been happening in the US and UK real estate markets is very far away, these days the money of the world is mingled. The credit crisis affecting the banks of the world are an example of how local problems become global problems.

And having visited NZ in September, I was amazed at the number of For Sale signs. It was dizzying. Everyone is trying to make money in real estate.

No one likes to hear that the market has topped out. Especially if you own a home. However, folks in the US didn’t listen to the obvious signs. It took about one year from the first signs of softness until the present situation. And for those that don’t own a quality home in a desirable location where there are jobs are wondering what their houses are really worth.

]]> By: aaron http://www.26econ.com/the-new-zealand-real-estate-market/#comment-554 aaron Thu, 15 Nov 2007 12:42:18 +0000 http://www.26econ.com/the-new-zealand-real-estate-market/#comment-554 Paul: Thanks for the detailed comments. It'll be really interesting to see what happens over the coming months. Apartments are a bit of a special case I think, where clearly in Auckland there's an oversupply of low quality. Paul: Thanks for the detailed comments. It’ll be really interesting to see what happens over the coming months. Apartments are a bit of a special case I think, where clearly in Auckland there’s an oversupply of low quality.

]]> By: Paul http://www.26econ.com/the-new-zealand-real-estate-market/#comment-553 Paul Thu, 15 Nov 2007 10:12:11 +0000 http://www.26econ.com/the-new-zealand-real-estate-market/#comment-553 While I agree with you in theory, there are always certain circumstances that will dictate people selling their properties for less than they originally purchased it for. Even if nominal house values stay static, there will be plenty of opportunities for buyers to secure property at prices below what the original owners paid. Due to the simple oversupply and lack of demand. One recent example is the auckland CBD market where buyers can purchase properties 50% below their 2004 selling price. Prices in Auckland are dropping right now in real terms from their early 2007 highs, though it will take until early 2008 for you to clearly See that data. While I agree with you in theory, there are always certain circumstances that will dictate people selling their properties for less than they originally purchased it for. Even if nominal house values stay static, there will be plenty of opportunities for buyers to secure property at prices below what the original owners paid. Due to the simple oversupply and lack of demand. One recent example is the auckland CBD market where buyers can purchase properties 50% below their 2004 selling price. Prices in Auckland are dropping right now in real terms from their early 2007 highs, though it will take until early 2008 for you to clearly See that data.

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