In New Zealand, the tightening rate cycle which is currently in full swing – with more to come, is crushing the housing market, as illustrated by the August 2022 QV House Price Index for August which was released today. The average house value in New Zealand had fallen by some $89,917 to the end of August (down 8.5%) compared with the January peak – which is a rate of some $424 of lost value per day. “It looks as though it’s going to get tougher before it gets any easier for sellers. First-home buyers will continue to struggle for finance with tight credit conditions and affordability constraints. Plus, there’s still plenty of new homes in the pipeline, which will add further to oversupply, putting further downward pressure on prices.”
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I caught up with Steve from Canstar to discuss the fallout from the RBA rate rises. Steve Mickenbecker is in Canstar’s Group Executive Team, bringing more than 30 years of experience in the Australian financial services industry. As a financial commentator for Canstar, Steve enjoys sharing his expertise across topics such as home loans, superannuation, insurance, mortgages, banking, credit cards, investment, budgeting, money management and more.
I discussed the RBA rate rise on the ABC this morning on RB with Patrica Karvelas. “Mortgage ‘prisoners’ trapped as RBA lifts cash rate” https://www.abc.net.au/radionational/programs/breakfast/mortgage-prisoners-trapped-as-rba-lifts-cash-rate/101412718
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This is an edited version of a live discussion about the current state of the property markets. We look at recent price falls, as well as the latest from our modelling, including information at a post code level. And of course review today’s RBA decision. Warning, this show might run for longer than normal! Thanks to Cookie for his work on price falls!!
Original stream is here: https://youtu.be/R2Oy5Mk4RLA
Go to the Walk The World Universe at https://walktheworld.com.au/
The recent release of 2021 Census data revealed a shocking “one million homes were unoccupied”.
This statistic sent housing commentators, government agencies and policymakers into a spin. At a time of significant housing shortages, this extra million homes would surely make a big difference. They could provide housing for some homeless, ease the rental affordability crisis, and get first-home owners into their first home. There has been a great deal of speculation about how this has happened. Has it been caused by overseas millionaires buying up housing and leaving it as an empty investment? Is it Airbnb taking up homes that could be used for families? Or are cashed-up Gen-Xers double-consuming by living in one house while renovating another?
So, why were 1,043,776 dwellings empty on census night?
My latest chat with Edwin as we discuss politicians and their property portfolios, as first time buyers feel the pressure, and mortgage prisoners are a things. We also discuss some of the strategies to make sure agents are working for you.
https://www.ribbonproperty.com.au/
Go to the Walk The World Universe at https://walktheworld.com.au/
Economists, by nature or nurture, are like living and breathing versions of the Picasso paintings that show both sides of a solitary image. So well-known is their use of the phrase “on one hand … but on the other hand,” that President Harry Truman once famously asked for a one-armed economist to provide him with economic counsel.
With that caveat, New Zealand is I think a Petrie dish for how tight monetary policy plays out. The Reserve Bank of New Zealand started lifting rates earlier than other central banks last year and are set on more rises ahead.
Now according to a Reuters poll, New Zealand’s house prices are forecast to fall 10% this year and 5% next as aggressive interest rate hikes take some heat out of a blazing housing market, but not enough to solve the ongoing affordability crisis. And while the Reserve Bank in New Zealand does need to take home price movements into consideration when making interest rate calls, it seems to me that the objective of snuffing out inflation is number one, two and three, and to that end, if higher unemployment, or lower home prices are a necessary consequence then so be it.
Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
We put together the lending and property price data released today, as we highlight the strong relationship between price movements and credit availability. The ABS shows new lending is down significantly, and prices are sliding at an accelerating rate. Go to the Walk The World Universe at https://walktheworld.com.au/
Edwin and I was joined by WA Property Manager Rob, to look at what is happening in the West, as well as our normal chat about the latest numbers, and a stunning example of development which you will simply not believe. Plus some property related pet tips.
https://www.ribbonproperty.com.au/
Go to the Walk The World Universe at https://walktheworld.com.au/
Evidence is mounting that home prices are correcting towards pre-pandemic levels, and fast. Given the tightening of rates, borrowing power reductions, and consumer confidence falls, this is perhaps not surprising. But there are going to be consequences, and further falls should be expected.
Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
