Can you say housing bubble?

Today on stuff.co.nz it was announced that the NZ house prices were rising at an astonishing rate. I don’t know what the cause is but only in December 2011 it was announced that according to the Economist New Zealand’s real estate was amongst the most overrated in the world together with countries such as Australia, Belgium, Canada, France, Britain, the Netherlands, Spain and Sweden.

But today it seems house prices are growing by absolutely incredible sums and even with a global economy going down the gurgler money seems to be no object over here. Anybody has a theory as to why this might be so feel free to leave a comment and if it is your first please be patient as it only takes the approval of your first to be able to comment here regularly.

Here are some of my theories. Maybe Kiwi’s are so ignorant about the global economy they don’t know bubble building and hence debt creation when it hits them in the face and getting more people in the real estate trap is one way of manipulating New Zealand into more debt which we have to pay off with asset sales.

Maybe foreigners (American and Europeans) who can see the shit hitting the fan in the near future are buying real estate with a view to make a buck when people want to move to a saver country.

Over to you.

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6 thoughts on “Can you say housing bubble?

  1. As is the case of all assett bubbles fear and greed are the controllers. Greed is now, fear is just around the corner.

  2. This will not end well. Remedy is simple. Sell all housing you currently own and invest in gold/silver bank balances at high interest rates say in Australia. Buy back in 10 years, renting in the meanwhile or just travelling the world!

  3. I think ignorance of most things economic and financial by the people at large is a huge factor. I suspect there are external pressures in the Auckland housing market.

    However, I wonder if enabling people to tap their Kiwisaver for a house deposit has also assisted as well as the banks coming in on the back of that and offering 95% mortgages again. In doing that I think the banks are being reckless as well as arguably trading while insolvent. If so, shouldn’t they be liable for the debt when the SHTF?

  4. They have shit their own nests and now want ours
    Fukushima radiation and the pending US military state…

    Bankster Ganster Key… it’s a no brainer. A safe haven for his friends.

    NZ can kiss it’s lifestyle good bye.

    • People who have not woken up and whose only sources of ‘news’ are the controlled corporate media are going to walk into any trap that is set in front of them. Perhaps there’s an element of market demand pushing prices up if there are less properties on the market and more people are getting finance for ‘buying’ houses.

      • I think you hit the nail Richard, Demand is what drives house prices, not the bank. When I put a bid on a house (a fair bid as a result of a registered valuation) I was out bid by 100k. If people want the house and are prepared to be talked up by the agent then house prices go up. I think it has little to do with the banks and more to do with realestate commission.
        In my opion of course.

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