tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, March 19th, 6:25PM

Mortgages

Mortgage Rates Daily Commentary
Monday 18 March 2024  Add your comment
Activating DTIs and loosening LVRs - NZBA

The New Zealand Banking Association (NZBA) wants the Reserve Bank to loosen proposed debt-to-income (DTI) restrictions because of the internal conservatism of some banks. [READ ON]

rss
Latest Headlines

NZ housing boom pales by global comparisons

New Zealand’s isn’t the only housing market that’s booming. According to The Economist magazine, it’s practically a worldwide phenomenon. And the performance of the New Zealand market looks tepid against the international picture.

Wednesday, April 10th 2002, 5:44PM

by Jenny Ruth

The Economist’s newly created house price index shows global house prices rose 5.4% before inflation in 2001 and 3.2% in real terms. But that was dragged down by recession-mired Japan, where house prices fell 3.6% after inflation, and Germany which is still suffering from reunification blues and where house prices fell 0.9% in 2001.

By contrast, house prices in Spain jumped 11.4% after inflation, in Ireland they were up 8.6%, in Britain up 8.5% and the US up 5.6%.

In New Zealand, the Real Estate Institute’s figures show the national house price in December was 4.1% higher before inflation than in December 2000 and it was only 2.3% higher after inflation. Our biggest city, Auckland, fared marginally better with an after inflation increase of 3.95%. Wellington’s post inflation increase was only 0.8%.

OK, so New Zealand’s boom has only gotten a head of steam in the last couple of months. The institute’s February figures show the post inflation national increase was 4.5% from February last year with Auckland’s increase 1.8% and Wellington’s 3.1%.

But The Economist says US house prices jumped 9% in the year ended February, the biggest increase on record. That’s despite the recession and the 11 September terrorist attacks.

International cities have also enjoyed much bigger increases than New Zealand’s. Between 1996 and 2001, Dublin house prices rose nearly 20% a year, London’s rose more than 10% a year and New York’s rose 5% a year.

In February, New Zealand house prices were only 21.1% higher than in February 1996.

The Economist attributes the increases to historically low interest rates. It notes that in previous recessions house prices fell because they were caused by central banks raising interest rates to quell inflation. The current recession was caused by the bursting of the high-tech bubble while inflation stayed low and interest rates went very low as central banks tried to stimulate economic growth.

In the US the Federal Reserve’s key interest rate is currently 1.75%, it’s lowest level in 40 years. Our Reserve Bank’s official cash rate is much higher at 5% and only went as low as 4.75% post 11 September.

The Economist worries about what will happen as interest rates, and mortgage rates, rise. "Lower interest rates do not necessarily justify more borrowing and higher house prices; homebuyers may be suffering from a bout of money illusion," the magazine says.

But it also notes that home affordability, the ratio of house prices to average disposable income, is still below its late 1980s peak in both Britain and the US. In countries such as The Netherlands and Ireland home house prices are at record highs in relation to disposable incomes.

In New Zealand, AMP Banking’s survey shows home affordability here improved substantially last year.

« House price rises comingRates expected to rise this week »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 14 March 2024 9:32am

Previous News

MORE NEWS»

News Bites
Compare Mortgage Rates
Compare
From
To
For

To graph multiple lenders, hold down Ctrl key while clicking in list box

Also compare rates to OCR
Find a Mortgage Broker

Add your company

Use map
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com