APIA Blog

RSS Feed

Alistair Helm: Is NZ in a Housing Bubble?

Monday, June 30, 2014

Alistair Helm: Is NZ in a housing bubble?

Last week, we asked the EO of the NZPIF, Andrew King, for his take on whether NZ is in a housing bubble.  This week we are pleased to have the founder and CEO of Properazzi, Alistair Helm, sharing with us his views on the housing market.  

We asked Alistair

1. What are the warning signs of a growing house bubble? 

2. Do you believe New Zealand (and in particular, Auckland) to be experiencing a housing bubble?  

Alistair HelmAlistair Helm - Founder and CEO, Properazzi

The principle of a property bubble is created when the value of properties being bought and sold reaches a level that is out of context with the principles of affordability coupled with the underlying financial structure of debt that is funding these property purchases is out of line with rationale financial decisions and backed by rampant speculation. In my view the financial markets are acting entirely rationally in supporting the debt of the property market. There is more prudence in the banking industry than there has been, certainly as compared to the middle of the last decade. Certainly there continues to be strong demand for property that is located in areas of the country that  are proximate to the economic growth, but that demand is not irrational and prices are being paid based on buyers ability to pay and service the debt.

I do not believe that NZ generally nor Auckland in particular is experiencing a housing bubble. I believe that we have already seen enough signs that the heated property market experienced last year has eased considerably with the lead indicator of property sales trend peaking in October of last year. That weakness in sales has already cut the growth rate in prices right across the country and in Auckland. The next 12 months will see further slowing of sales and property price inflation falingl to below 5%.

Underlying the property market though is a demand fuelled by immigration and coupled with that economic growth that will likely for many years continue to see strong demand placed on the Auckland market as it will continue to be the magnet for economic migration domestically and internationally. As a result of this it is likely that through 2015 the rate of sales will turn around and trend upward and as a consequence prices will, having found a new more stable base, begin to pick up again.

Over to you now.  Do you think we are in the middle of a housing bubble?  Comment reply below.

 

Recent Posts


Tags

negotiation reserve bank lvr maintenance insulation cat ird education house prices market rent Question and answer unitary plan trust Must know Tribunal case study mortgage property maintenance inspection television CoreLogic Jeff Bezos heating Investor story TCIT watercare rent increase return ask an expert meth rental wof Sponsored post water bill wealth creation insurance interest only personal growth tenancy services damage cash-flow capital gain renovation bond housing affordability subdivision Editor's Choice initio finance investment strategy positive cash flow structure ring-fencing property cycle HSWA shower dome Holler twg report first home buying rta trespass relationship beginner investor tenant ventilation speculator investor Q&A tax nzpif equity cgt partners LIM anz letting fee income HHS interest rates rent sale and purchase management Gluckman Kris Pedersen Mortgages and Insurance legal tenancy tribunal debt enforcement auckland rent arrears property management development Must knows minor dwelling bond form RBNZ How to data security tenancy issues short-term rental wins winz trademe holiday house Standards New Zealand worksafe Investment tip financial advisers act buyer's agent warren buffett privacy fixed-term tenancy robert kiyosaki advice clnz building bad tenant gluckman report HHGA business banking government property value smoke alarm warm up new zealand rental market parry v inglis Guest blog sale and purchas boarding house Property (Relationships) Act termination principal and interest property buying rules auckland council sublease housing bubble productivity rta reform landlord market airbnb skill shortage DTI buying off the plan election 2017 extractor fan meth contamination ocr letting asbestos CCC Landlording Market report heater p lab RTAA 2019 scotney williams

Archive

Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo
09 360 2376
info@apia.org.nz

The Tenancy Practice Service and TPS Credit Control work closely with the Auckland Property Investors' Association. Our vision of bringing helpful resources, documents and high quality services to Auckland Property Investors and Property Managers is shared by APIA, so its a partnership that works well. 

The Auckland Property Investors' Association is a great organisation for those who want access to advice and information from a range of industry experts and partners. 



Mathieu Holt- Managing Director, The Tenancy Practice Service & TPS Credit Control
Through the Association I found the channels and methods to fund the purchase of property I never dreamed about. Grant Brown

All round it has been one of those things Neil and I felt was really worthwhile belonging to. We have learned so much it has just built our confidence in what we are doing.

Janice Bieleski
I read two articles in the monthly magazine that saved me over $5,000. That is my membership fee for the next 26 years and I am sure I will learn a whole lot more! John Duncan
Fantastic organisation. The networking opportunities are brilliant and provide us with information and opportunities that cannot be obtained anywhere else. We learn something new at every meeting and we've been in this game for nearly 20 years. Pauline and Gyanen Kumar

I find the information obtained from various APIA meetings very useful in guiding my own property investment and rental management.  I also enjoy the networking opportunities with like-minded investors.  I am inspired by other investors’ success and find the more experiences and knowledge that I share with others, the more confident I become.  

Thanks to all APIA event organizers and administrators for your brilliant work. 

Stella Shao

I like talking to people and learning from their experience because it gives me the confidence to invest well. I think it is a knowledge thing. I now know I am doing things the right way.

Stephen Weatherall

My APIA membership has become a total success.

Every time I attend a monthly or regional meeting I come away with so many useful and positive tips that have added value to my property investments and management.

Not only that, the website is a great place for practical advice and useful information. It has now evolved into an important resource for my business.

Talk about value for money! The discounts I have been getting at Bunnings when I present my APIA membership card have more than paid for my annual subscription!

Tim Duffett, Plan A Investments Limited