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Now for some good news

Thursday, May 1st 2008, 10:18AM 2 Comments

by Philip Macalister

Most of the talk in the media is all about bad news in the property market. There is no point listing the sorts of stories they run, but it seems, particularly on the weekends, that negative headlines sell papers.

Here at Landlords we like a bit of balance and reality on the situation. To us it seems there have been a couple of bits of good news for the market in the past week.

First up was the Reserve Bank's official cash rate announcement. To the ordinary bloke (or sheila) who invests in property, the statement seems pretty bland. But economists, who tend to specialise in decoding these official statements, reckon the bank had changed its stance on easing rates.


This time the central bank said that it "expect(s) that the OCR will need to remain at current levels for a time yet".

Previously it said that the OCR will stay where it is for "a significant time yet".
The economists reckon this is a big change and cuts could come earlier that the RBNZ previously suggested.

That's good news for the market. When rates start falling and banks become a bit more generous, the property market will accelerate.

I still reckon that when the market turns the corner and starts heading up it will do so quickly and sharply.

Secondly we had some migration figures, which again were positive. They showed a slight increase in the number of people coming to New Zealand.

There is a view that migration and the housing market dance together. The reason is pretty obvious. The more people we have coming to live here means that there needs to be more houses.

As BNZ chief economist Tony Alexander said: "This is actually the first positive piece of news for our poor housing market in a very long time."

While this post is about positives, it would remiss to say there is one negative. That is some research from Westpac which looks and the supply and demand balance for housing. Its key view is that they are roughly in balance. But it does suggest a slight oversupply of houses which is a negative for house prices.

I guess a few more immigrants will get us balanced again?
« Should you sell?All just a bunch of rose-tinted glasses? »

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Comments from our readers

On 7 May 2008 at 6:32 pm Warren Doel said:
I don't think there is any doubt that the present situation is unlikely to get worse. That sort of statement won't sell newspapers. There are signs that lenders are stating to feel more relaxed. All we need is the government to ease immigration and things will move quickly. We live in hope....
On 8 May 2008 at 11:10 am Blog: The Landlord says… » Blog Archive » All just a bunch of rose-tinted glasses? said:
[...] Blog: The Landlord says... « Now for some good news [...]
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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 ▼4.65 ▼4.80 -
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 ▼5.15 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 ▼4.45 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 ▲3.55 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 ▼5.50 ▼3.95 ▼4.05 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.55 3.99
Median 5.34 3.97 4.05 4.39

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