The housing market is showing strong signs of recovery according to the latest BNZ-REINZ Residential Market Survey.
The survey has run since April and all eight of the survey's major market measurements has risen over the last month.
Because the survey was so young the increases could just be a seasonal record but BNZ’s chief economist Tony Alexander thinks it is unlikely.
“Its probably only a small amount, the changes are too large across too many of the indicators to just say it’s purely seasonal. I think they are definitely signaling some new strength in the market,” Mr Alexander.
It was especially good to see investors coming back to the market, he said.
Approximately a net 15% of the agents surveyed indicated more investors were entering the market, the last survey showed a negative response of around 2%.
More first homebuyers were entering the market with a 48% net positive response up from 29% in the last survey. More first homebuyers were active in the Auckland's North Shore city area than anywhere else with a net 72.7% of agents reporting first home buyers in the market.
More agents indicated prices were increasing with 24% reporting compared to 10% last survey.
There has been a polar shift in the feeling of who is driven to transact, with a net 5% feeling buyers were more motivated compared to 17% feeling sellers were more motivated last survey.
Comments and questions
There seems to be an opinion that when house prices go up and more investors enter the housing market it is somehow beneficial to the national economy.
Bank economists all think this, probably self interests above national interests.
Part of the problem in the past with our economy is borrowed money pouring into non productive areas like existing houses which does nothing to improve NZ's position.
N.Z. desperately needs investors to re-enter the market because they provide the drive for further housing development. Doesn't take much to find solid evidence that N.Z. housing stock is severly depleted with forecasts of major housing shortages in some areas. People need somewhere to live! The government does not make a good landlord and history has proven that it is not very good at development either. So, that leaves the private sector to meet the need. I don't know why some Kiwis seem to equate 'evil' with 'property investor'. It seems to be some sort of purile tall poppy thing. Even investors in current housing create a domino effect that eventually feeds thru to new housing development. Without investment in property the only inevitable outcome is increased rentals and further housing shortage. Shortage of supply equals price increases driven by those who can afford to pay. Do not confuse house price increases with property investors! If anything, a well managed investment market should lead to increased supply and prices that find an economically sustainable level. And do not blame investors for the 'affordability gap'. That is a function of an economy that has major issues and is altogether an entirely different debate. However, just to put the cat amongst the pigeons, I would say that its probably the same people bleating about the affordability gap who are also against oil exploration and selective mining. Did anyone say something about trying to have your cake and eat it as well?...
I agree with Anonymous. There is this belief that rising prices is good. And it really bugs me that the people who report about the market are not objective in this regard. Even NBR journalists have lost their objectivity in this regard. I think part of the reason there is such a sluggish market is that prices are still too high, and expectations are held by owners that they should be higher, hence they are not offering for sale at current prices.
The affordability of houses has more to do with low wages than cost of building.
If you really thing house prices are to high just try building one and join the real world. Sure you can twick the building cost by lower land prices but in Auckland the plan to confine 75% of increase in demand to existing boudaries would seem to kill that idea.
quite simply the housing market is a farce by international standards and that is caused by no tax on capital and rents which are completely disconnected from the capital invested. the notion that untaxed captail gains are an acceptable trade off for cheap rental return on capital invested is economically nuts and economists should report such
Totally agree with Pragmatist.
Interesting analysis (for and against) here
http://www.landlords.co.nz/blog/is-there-a-property-bubble-brewing
The only way to have a balanced well worlking economy is to bring in a capital gains tax. Most other countries have it for one reason or another. Surely, other countries have not got it wrong and we are the only ones to have it right is nonsense.!
Bring in the capital gains tax and you will have people living with their parents until they are 50! ..... do we really want to deal with those kind of social problems?
Let's kick this capital gains tax rot into touch now and be done with it. It doesn't work, it's a bad idea and should be scrapped like the rest of the communist claptrap baggage that goes with it.
what???? And those with only state funded benefit income in this country don't live in some communial (collective)sort of housing arrangement with family or fiends? No one I know overseas still lives with their parents, mainly I would suggest because they actually have a job!
yes well said, this has always been a reason why there is a consistent shortage of houses.
http://www.goodreturns.co.nz/article/976485506/capital-gains-tax-the-new-zealand-case.html
for a very comprehensive pro & cons on CGT
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