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Signs of improvement squashed by disasters home and away

Signs of improving housing market activity have been thoroughly quashed by uncertainty surrounding a local natural disaster and now a foreign one, according to the latest ANZ Property Focus.

Wednesday, March 23rd 2011, 12:00AM

by Benn Bathgate

"Local and global seismic events have effectively quashed a recovery until late 2011 and 2012, though off a lower base," ANZ said.

The bank said the Government response to the Christchurch earthquakes would be critical.

"The experience of Chile shows that a concerted and speedy effort can see a quick turnaround in economic prospects in growth terms, though the hit to the nation's wealth will be long-lived regardless."

This further blow to sentiment has been reflected in the ANZ Property Gauges, 10 gauges the bank uses to assess the state of the market and look for signs of emerging trends.

Of the 10 gauges, only one showed a positive direction for house prices.

Interest rates, with cuts across the entire mortgage rate curve, was the sole gauge pointing to rising house prices.

Of the remaining nine gauges, two pointed to either upward or neutral movement, four were in neutral territory and three pointed to house price falls.

Among the neutral gauges mortgagee sales remained high but ANZ said the last data was from September and migration remained low.

Both supply-demand balance and consents and house sales pointed to either neutral or rising prices, with the bank saying issues of supply and demand are set to deteriorate further in Auckland and Christchurch.

Gauges for affordability, serviceability/indebtedness and liquidity all point to house price falls.

ANZ said that while the recent interest rate cuts would improve affordability, the level remained too high and that households continue to deleverage.

"The big uncertainty is whether households choose to spend some of their lower mortgage servicing costs, or use it to pay down their debt faster," ANZ said.

"Funny how sometimes it is difficult to get households to save when you want them to, and now to spend when you need them to."

 

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

« Momentum building in house market, according to ANZTax changes to ‘rebalance' economy away from housing »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.55 3.89
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.97 4.05 4.39
Kiwibank 5.20 4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 3.45 3.89
Sovereign 5.30 3.89 4.05 4.39
Sovereign Special - 3.39 3.55 3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.19 4.35 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.39 3.55 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.55 3.99
Median 5.34 3.99 4.07 4.39

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