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: If we want to reduce speeding, what do you think actually changes driver behaviour? 🛻🚨🚓
In the Post's article on speeding penalties, the question is asked whether speeding fines are truly about road safety, or are they just a way to boost revenue for the Crown?
What do you think? Should speeding motorists receive speeding fines or demerit points?
-
38.2% The sting of a fine (Money talks!)
-
61.8% The threat of demerit points (Nobody wants to lose their license!)
Trusted Painters for Every Home
Hi neighbours!
At Graham’s Painters we bring 40+ years of experience, a friendly team of over 20+ full-time professionals, and a “get-it-done” attitude to every job big or small.
We specialise in interior/exterior painting, roof painting, house washing, decking, fencing, wallpapering, and cedar weatherboards. We’re tidy, punctual, and perfect for busy families, non-DIYers, and retirees.
Discounts available for SuperGold Card holders
Serving all of Wellington, Hutt Valley & up to Plimmerton.
Message us today for a free quote, we’d love to help bring your home to life!
Some Choice News!
DOC is rolling out a new tool to help figure out what to tackle first when it comes to protecting our threatened species and the things putting them at risk.
Why does this matter? As Nikki Macdonald from The Post points out, we’re a country with around 4,400 threatened species. With limited time and funding, conservation has always meant making tough calls about what gets attention first.
For the first time, DOC has put real numbers around what it would take to do everything needed to properly safeguard our unique natural environment. The new BioInvest tool shows the scale of the challenge: 310,177 actions across 28,007 sites.
Now that we can see the full picture, it brings the big question into focus: how much do we, as Kiwis, truly value protecting nature — and what are we prepared to invest to make it happen?
We hope this brings a smile!
Loading…
