20% deposit needed to buy a house from oct
Apr 27th 2016, 8:58 am
#406
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Re: 20% deposit needed to buy a house from oct
Well RBNZ have a tough OCR call tomorrow, house prices surging but inflation (CPI) still well under target (Australia is in deflation) and wage inflation is...non existent. If they are going to persist with using the OCR to drive inflation things could get very interesting, remember CPI itself uses a very flawed methodology of calculating the impact of house prices on consumer spending.
LVR limits on rentals seem to have done nothing to curtail the rush to leveraged investment properties...of course leverage is a two way street. However supply is still constricted by government policy (RMA etc.) and local councils are penalised if they consent to new dwellings. The Reserve Bank can't change that.
LVR limits on rentals seem to have done nothing to curtail the rush to leveraged investment properties...of course leverage is a two way street. However supply is still constricted by government policy (RMA etc.) and local councils are penalised if they consent to new dwellings. The Reserve Bank can't change that.
Apr 30th 2016, 9:41 pm
#407
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Re: 20% deposit needed to buy a house from oct
12 times average salary for medium priced housing.
That means a 50% increase to bring into 8 times vicinity. Can't see employers doing that. So no doubt correction will hurt some more than others.
That means a 50% increase to bring into 8 times vicinity. Can't see employers doing that. So no doubt correction will hurt some more than others.
Apr 30th 2016, 10:23 pm
#408
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Re: 20% deposit needed to buy a house from oct
With predicted land tax affecting 17% drop in prices at 1%. What if it comes in at 4 or 5%?
Apr 30th 2016, 10:34 pm
#409
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Re: 20% deposit needed to buy a house from oct
"We have other and more effective ways of constraining and supervising the activities of commercial banks, other financial institutions, and financial markets."
https://www.linkedin.com/pulse/old-n...cs-steven-hail
https://www.linkedin.com/pulse/old-n...cs-steven-hail
May 1st 2016, 1:35 am
#410
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Re: 20% deposit needed to buy a house from oct
Despite the almost daily outcry in the media
no govt is going to take any realistic steps
to remedy the current situation.
Its political suicide for any govt who apply them
It will financially ruin so many people
no govt is going to take any realistic steps
to remedy the current situation.
Its political suicide for any govt who apply them
It will financially ruin so many people
May 1st 2016, 2:19 am
#411
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Re: 20% deposit needed to buy a house from oct
On the other hand why regulate banks? Most have taken margin from recent OCRs and hold better capital ratios against mortgage books than required. In addition LVR ratios protect banks from a rapid drop in house prices by up to 20%. Nor is the taxpayer on the hook for banks in New Zealand.
Banks (either the Reserve Bank or commercial institutions) can't change the supply dynamics that have driven house prices to unaffordable levels. They didn't create impediments to supply like the RMA, punish councils for consenting new dwellings or create a ridiculous tax system.
Banks (either the Reserve Bank or commercial institutions) can't change the supply dynamics that have driven house prices to unaffordable levels. They didn't create impediments to supply like the RMA, punish councils for consenting new dwellings or create a ridiculous tax system.
May 2nd 2016, 8:17 pm
#415
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Re: 20% deposit needed to buy a house from oct
May 3rd 2016, 9:52 am
#416
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Re: 20% deposit needed to buy a house from oct
Interesting difference in thinking between reserve banks:
- Australia cut from a base rate of 2%, inflation was at 1.3% and unemployment at 6%.
- New Zealand didn't cut from 2.25%, inflation was 0.4% and unemployment was at 5.8%.
However it actually drove down the NZD suggesting people expect RBNZ to cut harder and faster now Australia have cut.
- Australia cut from a base rate of 2%, inflation was at 1.3% and unemployment at 6%.
- New Zealand didn't cut from 2.25%, inflation was 0.4% and unemployment was at 5.8%.
However it actually drove down the NZD suggesting people expect RBNZ to cut harder and faster now Australia have cut.
May 11th 2016, 8:44 am
#417
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Re: 20% deposit needed to buy a house from oct
... after the release of the bank's half-yearly Financial Stability Report (FSR), Wheeler and Spencer said they were "increasingly concerned" about the Auckland housing market and were "seriously considering" introducing new lending control measures, including a new Debt-To-Income (DTI) ratio control.
"It is something we would look at. It has been successful in other countries, particularly the UK, which has recently adopted debt to income ratios."
The Bank of England limited loans with a multiple of more than 4.5 times income to no more than 15% of mortgage flow from October 1, 2014...
Currently around 35% of owner-occupier mortgage lending in New Zealand is done with debt to income multiples of more than 5, while almost 60% of investor lending is done with DTIs of more than 5...
"It is something we would look at. It has been successful in other countries, particularly the UK, which has recently adopted debt to income ratios."
The Bank of England limited loans with a multiple of more than 4.5 times income to no more than 15% of mortgage flow from October 1, 2014...
Currently around 35% of owner-occupier mortgage lending in New Zealand is done with debt to income multiples of more than 5, while almost 60% of investor lending is done with DTIs of more than 5...
May 12th 2016, 7:24 am
#418
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Re: 20% deposit needed to buy a house from oct
I sense the govt are in a balancing act. They are making statements about possible new policies to lower Auckland house prices but they dont want to cause panic and a crash. But nothing they are saying is having any effect so far.
Jun 4th 2016, 11:41 pm
#420
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Re: 20% deposit needed to buy a house from oct
ANZ made quite a few changes aimed at reducing their high risk market exposure.
Probably the most interesting of which is they won't lend against apartments off-plan which rules out a lot of high density urban development projects. That's really going to crimp a lot of future projects in Auckland because anyone looking to buy into a new development, no matter how reputable the builder, will have to have the cash up front.
Still think the finance minister is wrong about interest rates however. When you GDP growth is fueled by credit growth reserve bank rates can't raise rates. The problem is running out of space to cut rates.
Probably the most interesting of which is they won't lend against apartments off-plan which rules out a lot of high density urban development projects. That's really going to crimp a lot of future projects in Auckland because anyone looking to buy into a new development, no matter how reputable the builder, will have to have the cash up front.
Still think the finance minister is wrong about interest rates however. When you GDP growth is fueled by credit growth reserve bank rates can't raise rates. The problem is running out of space to cut rates.
