Why NZ won't follow Australian property downturn
With house prices now falling significantly in Australia, the inevitable question is beginning to arise: “will the downturn spread across to NZ?” We’re not convinced that it will, for three main reasons.
• First, NZ does not generally have an oversupply of property of any type or in any region. Indeed, our largest city of Auckland has the opposite problem: a large shortfall of housing, which is propping up values even though property is relatively unaffordable in our biggest city. By contrast, it is widely accepted that there are too many apartments in Sydney and Melbourne, and this is dragging down prices. So-called settlement risk (where a buyer who purchased off the plans some time earlier suddenly walks away from the transaction) is a growing problem for some of these large-scale developments.
• Second, NZ is yet to see the same increases to mortgage rates that other countries are seeing, including Australia. In fact, although there are now signs that it might be ending, the banks here have recently engaged in a “rate war” with borrowers enjoying some pretty sharp fixed-rate deals in recent weeks. On a related point, about 80% of mortgage debt is on fixed interest rates in NZ, giving borrowers time to adjust their finances in advance of an interest rate increase being pushed through to their mortgage. That is in stark contrast to Australia, where floating rates dominate.
• Third, NZ’s regulators have arguably been much more proactive than Australia’s in curbing the riskiest lending practices. Interest-only lending is more controlled in NZ, and it’s also easy to forget that we’ve actually had the LVR restrictions (in one form or another) here for five years now. This has put our mortgage market on a surer footing than Australia To be fair, none of this precludes a housing market downturn here in NZ at some stage in the future. But for now, and with the labour market a huge support for property, we’re confident that Australia’s problems won’t be replicated in New Zealand for the foreseeable future.
Article by Kelvin Davidson
Latest scams to look out for 👀
Neighbourly hopes to keep you safe by keeping you informed of the latest scams circulating. This week, we are sharing two common text message scams:
NZTA / Waka Kotahi scam:
- The scam is a text message saying it's from New Zealand Transport Agency Waka Kotahi, and it encourages the recipient to pay an overdue road toll by visiting a fake website, threatening to take the matter to court within 15 days if they don’t pay up.
- The aim is to trick people into giving away their personal details or pay them money.
- While it is not the first time toll payments have been utilised by scammers, the threat of court action could see more people fall victim.
- The sender will either be a unknown phone number or unknown email address.
Want to report one of these scams? Do so, on Netsafe
NZ Post scam:
- This scam arrives by test message and says it's from NZ Post.
- The premise is that delivery of your parcel was unsuccessful so in order to rearrange delivery. you must click on a link to give your correct address.
- The aim is to trick people into giving away their personal details or pay them money.
- NZ Post advises people not to click the link, but to report the message to the Department of Internal Affairs by forwarding it to 7726.
Think you may have fallen prey to a scam? Get in touch with Netsafe or contact your bank if it involved your bank details.
Remember, if you didn't expect the message and you are now asked to share personal details or money, then stop contact and seek advice elsewhere.
Feel free to share any below that you've encountered recently. This may help others across the country be aware.
What's On: THE WAIKANAE BEACH INDOOR MARKET
THE WAIKANAE BEACH INDOOR MARKET
- Waikanae Beach Community Hall
What's On: THE WAIKANAE BEACH INDOOR MARKET
THE WAIKANAE BEACH INDOOR MARKET
- Waikanae Beach Community Hall
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