A sea of red for the housing market. Bigger and faster falls than GFC. Wellington down 20%, Auckland down 15%.

[purebliss]

@andro You are comparing apples and oragnes here.

GFC is big govt spend up after crash.

Now is crash after big govt spend up.

It seems house prices are intrinsically linked to interest rates at this point (ignoring our horrid supply side issues).

 

[mom23]

@purebliss Of course house prices are related to interest rates, my mates said they would never drop due to supply issues but the supply of credit is a huge factor in a housing boom

 

[catholicbat]

@purebliss We are a taker of interest rates set by big economies around the world, short of crashing our export by raising NZD rates gonna head up.

 

[scootydash]

@purebliss What are oragnes?

 

[purebliss]

@scootydash Deez nuts

 

[pyroisonfire]

@purebliss Haha you sir, brightened my day.

 

[resjudicata]

@andro ItS nOt a BuBbLe ItS sUpPly aND DeMaNd. It WonT pOP..
Where my boomers at? Awfully quiet these days..

 

[andro]

@resjudicata They are busy crying "don't raise the OCR think of the first home buyers" and "Oh recession" and "Inflation is imported overseas so don't raise the OCR", the smart ones know full well that the party is over and cashed out and retired and the others are trying to keep interest rates as low as possible to hold onto the tax free profits.

 

[seattleartcolony]

@andro Many Boomers won't have a mortgage or can choose to pay it down as they sold there worst propertys for a premium last year... They have been through many a crisis and know when to add some fat to thier budgets. In fact some will be licking thier lips ready to buy back assets at a 30 percent discount. This is a once a decade fire sale.

For example a boomer I personally know, late 70s, was super excited about the covid crisis may 2020, buying bitcoin and shares which he made a heap of money off. In short , don't always follow the herd and get caught up with hype.

 

[resjudicata]

@andro On the plus side the brightline tax is becoming less of a problem for them with every passing day.

 

[damian333]

@resjudicata Plenty of younger people were saying it wouldn't pop not that long ago.

 

[geneque]

@resjudicata Yeah, nah. My own siblings said it would never pop. LOL

 

[resjudicata]

@andro Crash and burn, and may it rise like a phoenix from the ashes, and not be a fucking shitshow thanks to effective and sensible regulation (dreams are free?)

 

[resjudicata]

@andro Imagine paying a million and a half for a house in the first place.

 

[andro]

@resjudicata Especially in examples knowing somebody else paid 300k 10 years ago or it still needs renovations.

 

[sonnybaker]

@andro Excellent point

 

[moonlightlaura]

@resjudicata In 20 odd years, you'll still be using that phrase but for entirely the opposite reason.

 

[karenlouise]

@moonlightlaura Dunno - it took 30 years for prime city centre appartments in Tokyo to recover to their 1990 peak - if you bought in 1990 and sold 20 years later in 2010 - you would have still made a massive loss. But you are right - if you wait long enough prices tend to come back - it is just the interim bit that can be painful for anyone that has to sell

 

[moonlightlaura]

@karenlouise There is always going to be an exception but for 99% of houses in the world it goes up. I wouldn't put money on any house going down in value over a 20-30 Yr period.

 

[karenlouise]

@moonlightlaura absolutely - but it is that period where they are lower than they were that tends to cause the pain.

It is all well and good to say "dont sell and you will be fine in the long run" but that is not always an option

In the 89-93 price falls in the uk (which I lived through and remember well) - the people that really suffered were the ones that could not afford to sell - couples who got divorced but had to continue to live in the same house with someone they hated because they could not afford to sell it and pay back the mortgage on it, people who lost their jobs so they could not pay the increased interest rates - but could not even escape by selling their house for enough to cover the outstanding balance, etc

Negative equity traps people in the house they are in regardless if it is the house the want/need/can afford - often with the only way out being bankruptcy.

It will not affect me. It may not affect you. Most will be fine. Many will have a tough time but for some it will be devastating.