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Negative forces consolidate

The housing market has “stalled at the lights” and unable to move ahead, according to the latest property gauges released by the ANZ Bank.

Wednesday, July 23rd 2008, 7:24AM

by The Landlord

The eight gauges are used to assess the state of the property market to show whether warning signs are emerging. Most gauges have consolidated or are beginning to weaken. The exception on the downside is house sales, which have plummeted to a 16 year low. The bank says once house prices follow suit, affordability and serviceability will consequently start to drop as well.

The report shows affordability is still at expensive levels for home buyers. Serviceability and indebtedness are high and the bank comments it is “similar to being stuck behind a logging truck on a steady grind upwards, with no passing lane in sight”.

Interest rates remain high but in answer to most mortgage holders’ dreams, the ANZ says, “a sudden dip may lie around the corner!”. Consents and house sales are down, as is liquidity and the availability of credit to support the property market. The global market is now regarded as neutral in terms of its impact on the New Zealand property cycle. As far as supply and demand go, the bank reports that it’s in balance and “traffic is flowing smoothly and in both directions”.

Another theme shown in the report is the housing market struggling against a backdrop of a weak New Zealand and global economy, with a chasm-like gap appearing between the median list price and the final selling price. This has widened to 4.6%. The ANZ says it’s another sign sellers are now willing to discount their price expectations in light of the current weakness in the market. The number of days it takes to sell a property are also rising – pointing to further downward pressure on prices.

A similar trend has prevailed across most regions, the only exception being Hawke’s Bay where the differential between selling and listing prices has narrowed over the past year and a half 

The economy continues to weaken, says the report. Yet the messages coming through from leading gauges including consumer and business confidence (the weakest the bank has seen since 1991/92) along with continued weakness in the equity market reveal the seeds of an upswing and recovery are gradually being sown.

The NZ dollar has trended down against the Australian and is attractive for exporters. Fiscal  policy will deliver tax cuts late in the year. “We believe the Reserve Bank is set to cut interest rates, although they need to fall a long way to have a direct cash-flow benefit to households.”

And it continues: “Facing falling sales and rising costs, we are detecting a sharp change in attitudes across the business sector. There is a far greater focus on costs, extracting efficiency and driving productivity. This is a pre-requisite to the recovery and a positive dynamic.”


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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 ▼7.45 ▼7.09 ▼6.95
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼6.85 ▼6.49 ▼6.35
ASB Bank 8.64 7.14 6.75 6.39
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 - 7.14 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 7.74 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 - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 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 6.89 6.55 6.35
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 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.74 7.74 7.09 6.95
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Lender Flt 1yr 2yr 3yr
Westpac 8.64 7.49 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 6.89 6.75 6.39
Median 8.64 7.14 6.82 6.65

Last updated: 18 July 2024 10:19am

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