Mr Good News here again
Thursday, February 5th 2009, 4:34PM 
4 Comments
I continue my quest to put some reality checks on the property market and what is happening. This week seems to have been dominated by news which I would mainly catergorise as positive.
Yesterday we had some migration numbers. Now you may wonder what is the relevance. Simple – immigration flows and house prices are strongly correlated. When they are strong, house prices are up as these people need somewhere to live.
While the numbers weren’t mind-blowingly positive (a small inflow in December of 300 and 3,800 for the year) at least they were positive. One comment I read somewhere was that there was an expectation fewer people would leave New Zealand because of the credit crunch and the difficulty finding work in countries like the UK.
One could also argue the government’s changes to the RMA are good for the market. No doubt they are not negative. However, I have a view that the RMA isn’t a big deal for mum and dad property investors. Sure it is for the big guys and the developers, but for the average property owner? I don’t think so.
If I am wrong and you have stories about how the RMA has hurt your investments, I’d love to hear them.
The other positive news is the continuing fall in home loan rates. While some don’t think that is a driver of the market, investors I know see it as being a big plus.
While this week’s news has some goodness about it, I suspect the same won’t be said next week when the QV stats are released. My prediction is that you will see house prices continue to soften and the 12-month drop will be around the 10% mark for many places. But if the Barfoot numbers this week are an indicator, then we may see a slight firming in prices starting to appear.
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Comments from our readers
On 5 February 2009 at 7:35 pm Nick said:
The naysayers are saying that now is not a good time to buy because property prices may fall another 5-10%. Why not subtract 10% from your offer and get property with great CF at low rates now when everyone else is hanging back? On 6 February 2009 at 8:07 am Ian said:
Nick, you sound like it is as simple as one-two-three with sellers accepting low offers from investors than making them additional low by taking another 10% off!!! As a salesperson for sellers the mention of the word "investor" turns a seller negative as soon as they hear it! I would rather have a happy client and a happy customer with both feeling they had got a "fair" price, because one day the investor becomes a seller! On 6 February 2009 at 12:53 pm david said:
I'm an agent in Wellington's Northern Suburbs. The last few weeks have been busy with new enquiries and full open homes especially in the first home buyers bracket up to $400k. Stocks on the market are still very low with little new coming onto the market in my area at present. Consequently, we have seen a bit of a clear out of stock that has been sitting for a few months as the pent up demand begins to flow into sales. My pick for the next few months is a slight rise in prices (yes upwards!) with a continued price plateau through winter. Further interest rate drops will be stimulatory. This picture may sound different than alot of areas around NZ but is what we are experiencing in Wellington's Northern Suburbs currently. On 10 February 2009 at 12:34 pm Paul said:
I would like some analysis done on what Unemployment rising to 7 or 8% will do to house prices. Commenting is closed
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