Category: Home Prices

Kiwi First Time Buyers Getting A [Brief?] Look-In?

New Zealand’s house price slump has given first-time homebuyers a welcomed leg up in their quest to purchase a property, but it may be a short-lived opportunity.

For a certain segment of the nation’s would-be homeowners — those armed with sizable deposits and solid incomes — 2023 has been a heartening year, with first-time buyers grabbing a record 26% share of the market in the third quarter, according to CoreLogic New Zealand. While an 18% fall in house prices between November 2021 and May this year made homeownership more obtainable, also working in their favor has been strong wage growth, a possible peak in interest rates, an easing of lending rules and government policy changes.

“This is a window of opportunity,” said independent New Zealand economist Tony Alexander. “This is good as it gets.” But Alexander has further words of caution for those looking to get on the housing ladder: The clock is ticking.

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Its Edwin’s Monday Evening Property Rant!

More from our property insider Edwin Almeida as we look at the idea of building up, not out, prefabricated housing, poor quality rental property, and the mythology of property listings. And at the end, a real horror show!

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Its Edwin’s Monday Evening Property Rant!

Edwin, our property insider and I explore the question of under quoting and include original footage showing it in action! We also discuss the interpretation of data, and the potential impact of the latest developments in China.

https://www.ribbonproperty.com.au/

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Well, We’ll Cover As Much As We Can! – With Tarric Brooker…

Another deep dive into the data with Journalist Tarric Brooker as we explore the recent events in China, the housing story (and political announceables), the mortgage cliff (or not) and lots more.

Slides are available here: https://avidcom.substack.com/p/dfa-chart-pack-18th-august-2023

Tarric’s article which we mention is here: https://avidcom.substack.com/p/aussie-fixed-rate-mortgage-cliff

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The Elephants In The Room Of Property Prices

Home prices are driven by a combination of demand where population growth thanks to high migration puts upward pressure on prices; supply where more property for sale puts downward pressure on prices, and availability of credit as the catalyst for transactions to occur.

Much of the debate is currently centered on supply side issues. As I discussed last week, Outgoing Governor Phil Lowe, urged governments at all levels to work together to address the problem of housing affordability. Notably, he dismissed rent controls as a short-term fix that would provide immediate relief by reducing the incentive to fix the key problem: supply.

“There aren’t short-term solutions here. The solution has to be putting in place a structure that makes the supply side of the housing market more flexible and that means zoning and planning deregulation and it means state and local governments being part of the solution.”

This means that first time buyer incentives, or rental support just make the problem, worst – something which I have highlighted over the years (and which by the way the Productive Commission also confirmed).

But my fear is that the un-defused credit bomb will be skirted around and as the supply side elephant is paraded through the streets. But it is the credit Elephant in the room which should be addressed, even if it shrinks bank balance sheets and profits. If not, nothing will fundamentally change and prices will remain as out of whack as they currently are.

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The UK Property Market Is Slowing!

UK households are facing an avalanche of cost pressures triggered by rising interest rates and the worst cost-of-living crisis in a generation. Key mortgage rates soared above 6% again this summer, and homebuilders including Ballymore Properties and Vistry Group Plc have already said they’re planning to cut staff numbers.

No surprise then that Britain’s property market showed signs of slowing to a crawl after a jump in mortgage costs reduced both buyer demand and the volume of sales. The figures add to evidence that the housing market is weakening after the quickest series of increases in interest rates lifted the cost of mortgages. Lenders including Nationwide and Halifax say property prices are falling, and some expect a peak-to-trough slump of 10% to 12% is “very likely.”

The Royal Institution of Chartered Surveyors (RICS) UK Residential Survey for July 2023 says at the national level, new buyer enquiries posted a figure of -45%, like last month’s figure of -46%. As a result, this metric continues to signal a sharp downturn in buyer demand following the latest escalation in mortgage interest rates. When viewed at the level of the English regions and the four nations, all parts of the UK display a firmly negative return for new buyer enquiries over the month.

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A Dose Of Reality, With Tony Locantro

I caught up with Tony Locantro from Alto Capital in Perth , to discuss the current dynamics across markets, property and more. Managed to fill my bingo card again, but the messages are so relevant given the current state of play!

https://www.altocapital.com.au/about

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DFA Live Replay 20 June 23 – Latest Financial Stress Analysis

This is an edited version of our latest live stream where we look at the latest economic data, our modelling and post level results.

We also corrected the audio which in the live version was a bit all over the place!

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