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
Poll: How should Guy Fawkes be celebrated?
While it is a fun occasion, fireworks on Guy Fawkes Night has caused much conflict over the years, upsetting our pets and disrupting the sleep of neighbours.
How should we celebrate Guy Fawkes Night? Vote in our poll and share your thoughts below.
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28.5% With a city-wide public fireworks display
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20.3% Small fireworks displays in each community
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7.7% Keep it as is
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32.9% We shouldn't celebrate it!
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10.3% Anything but fireworks
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0.4% Other - I'll share below
Solve This Riddle or Be Left Scratching Your Head!
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with piercing force, I crunch out fate.
I grab victims, proclaiming might,
and physically join with a single bite.
What am I?
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Have you seen Colin?
Police are appealing for information to locate 14-year-old Colin, who has been reported missing in Titahi Bay.
He was last seen at around 6.15pm, Monday 4 November. He was wearing a khaki green sweatshirt and black-and-white striped basketball shorts, and riding an e-bike.
If you have seen Colin, or have any information that may assist in locating him please update us at 105 online or call 105, referencing file number 241104/1862.
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