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20% deposit needed to buy a house from oct

20% deposit needed to buy a house from oct

Old Jun 5th 2016, 1:00 am
  #421  
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Default Re: 20% deposit needed to buy a house from oct

All the noise seems to suggest a stock market/housing market crash in the next 12 months.

If you still want skin in the game try these 3 bedroom apartments room $869,000 or perhaps a 3 bed terrace for $989,000. Both in Albany.

Features | Verdant Lane Apartments & Terrace Homes Albany, Auckland
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Old Jun 5th 2016, 3:43 am
  #422  
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Smile Re: 20% deposit needed to buy a house from oct

Originally Posted by jmh
All the noise seems to suggest a stock market/housing market crash in the next 12 months.
I think the current US bull market is now the second longest bull market since the second world war (beaten by the .com boom running from October 1990 to March 2000). That said this is unlikely to be like the GFC all over again because credit is still very cheap and the financial sector has been de-risking globally (although home loan credit growth in NZ has been a bit of an outlier but the global market is much bigger than us.)

This has to be the least loved and most feared bull market. I think it was Peter Lynch who wrote that bull markets always go on for:
.
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Old Jul 5th 2016, 11:25 am
  #423  
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Smile Re: 20% deposit needed to buy a house from oct

Originally Posted by Charismatic
Now at over $975,000 and likely $1m+ by Christmas at this pace.

Staggering to me banks would take this kind of credit exposure even with an LVR buffer, when this tide goes out there may be more than one caught swimming naked. Let's just make sure the public end up with no exposure. Bubbles tend to persist longer than most people expect.
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Old Jul 5th 2016, 9:08 pm
  #424  
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Default Re: 20% deposit needed to buy a house from oct

The theory says that a sudden increase in prices like this is a sign of an impending crash - note also the same thing is happening in the stock market which is concerning. Gold and silver are up - maybe the time is nigh.
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Old Jul 9th 2016, 12:21 am
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Default Re: 20% deposit needed to buy a house from oct

My partner and I have saved a $30,000 deposit so far, thats including our kiwi saver but looking at the fact that in Christchurch house prices have risen $40,000 dollars in two years is scary, saving up to the 10% deposit mark will end up being too difficult if they keep rising so fast not to mention prices are getting to the point where they just aren't worth it.
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Old Jul 9th 2016, 12:36 am
  #426  
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Wink Re: 20% deposit needed to buy a house from oct

The Reserve Bank announced a consultation with...blah, blah, blah and nothing was actually announced.

Then the Prime Minister poked the Reserve Bank for not doing anything immediately which is very funny because not doing anything at all about housing affordability has been this governments Auckland housing plan for years now. Surely any blame here should land squarely at the feet of government, the Reserve Bank can't modernize the RMA or offer any of the raft of options open to government.

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Old Jul 18th 2016, 10:09 am
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by Charismatic
The Reserve Bank announced a consultation with...blah, blah, blah and nothing was actually announced.
Looks like an out of sequence announcement is due from RBNZ on Thursday. Wouldn't be surprised me if they say nothing new or interesting but just confirm a likely rate cut based on forecasts etc. etc. etc.

Inflation rate is really low still at 0.4%, under 1% target since Q3 2014. Not even been close to the target rate. Consensus is forming around another rate cut but it's likely commercial banks will opt to pass on only a small part (might see sub-4% again on 1 or 2 year fixed rates.)

We asked earlier in this thread if New Zealand would fall into the same trap as other countries with near zero rates, poor productivity and wage growth. At the moment seems increasingly likely.
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Old Jul 18th 2016, 8:23 pm
  #428  
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by Charismatic
We asked earlier in this thread if New Zealand would fall into the same trap as other countries with near zero rates, poor productivity and wage growth. At the moment seems increasingly likely.
Monetary policy is proving to be useless (who would've thought).

Time for some fiscal stimulus then.

Last edited by LoCarb; Jul 18th 2016 at 8:34 pm.
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Old Jul 19th 2016, 8:08 am
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Smile Re: 20% deposit needed to buy a house from oct

LVR limits to increase for landlords and people trying to buy houses in September. Debt to income ratios rereannounced.

Meh. Nothing likely to have any long term effect.
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Old Jul 19th 2016, 10:52 am
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Default Re: 20% deposit needed to buy a house from oct

deposit up to 40% for investors
that's around $100k extra on a median priced property taking a deposit up to $390k..wow !!
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Old Jul 20th 2016, 6:18 am
  #431  
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Default Re: 20% deposit needed to buy a house from oct

But investors will still be able to just shift capital (made on rising property prices) from one property to become a deposit for the next. Sure, this will slow down the investors who are new to the game and those with smaller portfolios (what politicians over here like to call "mum and dad investors" in an attempt to feed a discourse about property investment being attainable for all, blah blah) but the big fish will be laughing as first competition from first time buyers was knocked out and now the smaller fish gone.
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Old Jul 20th 2016, 10:40 pm
  #432  
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Default Re: 20% deposit needed to buy a house from oct

Very interesting article from someone who's been in the banking industry a long time. In other words, old enough to have seen it before:

David Hisco: Housing and NZ dollar over-cooked - Business - NZ Herald News
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Old Jul 21st 2016, 7:07 am
  #433  
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Smile Re: 20% deposit needed to buy a house from oct

He is right but I'm going to add that the reserve banks job is to maintain financial stability. They only care about affordability in so far as it risks taking down a bank or a house price recession impacts economic growth.

The reserve bank have now acted a couple of times and have more on the cards, it's time for government to free up supply.
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Old Jul 21st 2016, 11:19 am
  #434  
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Default Re: 20% deposit needed to buy a house from oct

Rumour from the UK is that the banks wouldn't survive a long term major drop in house prices as a significant part of their equity is in loans secured against houses.
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Old Jul 21st 2016, 8:53 pm
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by jmh
Very interesting article from someone who's been in the banking industry a long time. In other words, old enough to have seen it before:

David Hisco: Housing and NZ dollar over-cooked - Business - NZ Herald News
To quote David Hisco:

"But, because New Zealanders aren't good savers banks have had to borrow from offshore to fund this rapid expansion in housing lending. And this funding supply is not endless unless banks want to pay higher prices for it. I doubt banks can keep lending at the current huge volumes anyway."

Thanks to the Bank of England (April 2014 statement) we now all know (or should by now) that banks don't on-lend funds, but create new money when they lend.

I will give him the benefit of doubt and assume he is referring to banks borrowing overseas to increase their reserves at the NZ Reserve Bank, not to directly fund Auckland housing.
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