This week there has been discussion of the Reserve Bank moving toward further changes to monetary policy to act as a kind of speed bump to slow down the real estate market. The current thinking is they will link incomes to mortgages, essentially limiting the amount one can borrow based on a multiplier of income (say you can only borrow five times your income). For me this appears to be aimed at the booming Auckland market where the average time to pay off a house is 9.2 years on current incomes. But, what will undoubtedly occur is a pressure on low earning first home buyers who are already struggling to get onto the real estate ladder. It appears short sighted and poorly targeted and could effectively hand investors a better opportunity to buy with their competition being side-lined by more red tape. The Press has quoted the median house price for North Canterbury has actually dropped 5.3% in the past 12 months. I find this interesting for a couple of reasons, firstly as a company Twiss-Keir Realty has increased its average sale price by 2.3% in the past twelve months proving our salespeople get better value for our clients and second whatever speed bumps the Reserve Bank bring in will not be appropriate for a market that is seeing falling prices. Essentially a one size fits all alternative is not the answer and could have catastrophic results in certain places. The answer is a more tailored approach, simply bring in speed bumps that are Auckland centric. Auckland is the runaway train in the New Zealand real estate scene. For us in the South Island we have seen a steady market that has not had prices that are out of control. Last week I read on the stuff website an article about personal finances and something resonated with me. Having a young family has opened my eyes to the importance of financial stability and being able to provide for yourself in retirement – especially as there is only a finite number of working years in one’s life.
Essentially the article steps out five elements that successful people believe is the key to strong personal finances.
|
James Twiss
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Greg Roberts
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Archives
September 2020
|