Posts by Glenn Pearce
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Speaker: House prices and the "Magic Money", in reply to Russell Brown,
Although things may be changing a bit in Berlin.
When interest rates are so low you have to pay to keep your money in the bank you'd go looking for an alternative too.
We are currently experiencing the lowest interest rates in literally a lifetime, if you have some existing equity in a property you can borrow $1m and it will only cost you 50k a year.
IMHO low interest rates are the single biggest cause of the increase in property values.
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f you are trying to argue that it could be caused by a freakishly large drop in the number of houses selling (so that the small number is distorting things) I have never seen any evidence of that, and it is the kind of thing that would leave traces in the economy elsewhere. But by all means if you have evidence, bring it.
I was trying to use an extreme example of 1 house to demonstrate to you that an increase in the estimated value of all houses in the country does not require a corresponding increase in debt. Nothing more, I'm out.
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. - For house prices to go up, people have to pay more money than was previously paid for the house (or similar houses)
Yes but as Rich pointed out above only 1 house needs to be sold for an increased price for the value of all houses to be increased (House valuations are based on sales) but there is no corresponding massive increase in debt levels (except for the 1 person that bought the 1 house that was sold).
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The change in the scale of movements on Fig. 2 coincides with the adoption in 2004 of a new methodology for calculating the HPI.
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You're comparing the theoretical increase in the total value of the book (all houses in NZ) with the increase in debt used to pay for sale of part of the book (houses actually sold)
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…but if you look at the REINZ property sales graph is has the same pattern of rises and falls as the house values one, so without access to the REINZ sales data the similarity of the REINZ graph to the total value graph means that the lack of relationship between values and debt should be reflected in prices.
The REINZ sales graph and the QV values will always correlate because recent sales are used as input to calculate the QV's.
You're not comparing apples with apples, you need the $ figures for houses actually sold to compare with the $debt, not the QV valuations.
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Snap with Rich of Observationz
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The housing value figure is based on QV though, it’s not the value of houses sold.
$300billion injected into the economy would cause massive effects, a good year from Fonterra injects $1b and the effects are felt.
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Speaker: Living under bridges, in reply to JessicaRose,
People trying to avoid paying for parking in the city?
Issue in St Mary's Bay now around Jacob's ladder, big problem in Kirribilli in Sydney too I believe
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Speaker: Living under bridges, in reply to Brodie Davis,
I think that might be the projected figure for between 12 and 3pm on a Summer Saturday?
I think there are some genuine safety concerns on the path with a non separated 4m wide path with a 5 degree gradient. You'll have a mix of cruise ship visitors wandering up to half way from the Northern side and weekend warriors on cycles going in both directions. The visitors will be inclined to walk on the wrong side (right) to take in the view as well.