The Unconditional Blog

The impartial voice of the industry

 

Archive for the ‘Media commmentary’ Category

14

Who’s to blame for the property market slow down? – part 2

Posted on: May 15th, 2008 | Filed in Media commmentary, The lighter side

This I promise is the last word (well for the time being on this subject) – but before we move onto other matters.

I was amused that rather in the same vein as the recent post on the synchronised collapse of property markets around the world, we also now have a synchronised “search for a scapegoat” for whom to blame for the property market collapse. This article was reported in the UK Sunday Times last weekend.

The article instead of laying blame at the feet of any one party (although it is titled “Estate Agents become scapegoats for the property market slowdown“) skilfully and with a large dose of “tongue-in-cheek” highlights that dependent upon your perspective (alluding I feel to a very English class level adjudication) you can blame:

  • What they see as the blog level – well it has to be anyone who has ever been associated in any way with a property show on television or, more bizarrely, those who have already paid off their mortgages!
  • What they see as the school gate level – this is where real estate agents get the venomous attack
  • Then at the level of dinner-party set – this is where the attack turns into what looks like envy where buy-to-let “private investor landlords” as we call them enter the firing line
  • Finally in the rarefied air of the corporate level – it is big business to blame as well as the professional services firms who support all this speculation

For me I rather like the answer provided by Andy Hamilton (one of our highly read and very well observed commentators on this blog) who so skilfully stated:

“Isn’t it odd how the press in such diverse nations as the US, Ireland, Spain, the UK and NZ all got together and decided to talk their respective markets down almost all at the SAME time; one wonders what their motives could have been? Oooooh I know the press wanted to piss off the industry that is collectively one of their biggest advertisers, surely that must be the reason”

Enough said.

11

Who’s to blame for the property market slow down?

Posted on: May 14th, 2008 | Filed in Media commmentary

This seems to be the question of the moment; and this week, this subject seems to have attracted a lot of media attention and speculation. The blog post on the correlation between media speculation (no, to be fair and consistent it was not speculation, it was reporting) on the potential for a catastrophic slide in property prices and a slow down in web traffic to an aggregate of real estate websites attracted a fair share of the radio and TV airtime.

The media has been quick to attempt to package this analysis up and make it into a “blame the media for the slowdown in the property market story” – as I have tried to get across in interviews the message is a simple one.

This industry is of far too critical an importance to all NZ’ers directly and indirectly to be left to the small range of media outlets we have in this country to influence consumer sentiment. The consumer deserves and requires a broader opportunity to understand the trends in the market and this is now being supplied through the benefits of the web:

  • This blog – Unconditional provides analysis, information, opinion and statistic from NZ and around the world to engage you the reader and to provide the opportunity to be part of the discussion
  • Other blogs – The most active and comprehensive is Bernard Hickey’s Rates blog which provides an incredibly comprehensive perspective on the all matters financial providing excellent coverage of property related matters
  • Forums – these are the ultimate user communities and allow you the reader to not just be part of the discussion, but also start the discussion – the diversity of content is very revealing and offers broad contribution from NZ and international. I would highlight two here Property Talk and Global House Price Crash
  • Further in an attempt to provide the audience of property searchers with a vehicle to better understand the market at a real local level we have provided a platform for real estate agents to have their own blogs so as to build their own community of readers interested in local markets or specialist areas of real estate. It is an emerging environment and as with any new initiative the cream will rise. We highlight new posts from what we call Voices on the home page below the latest Unconditional postings

Now compare just this short selection with what you had even 6 months ago (I recognise that Property Talk has been around a good few years) – you were largely influenced by the media giants of APN, Fairfax, TVNZ and CanWest. We are all aware of media consolidation and equally the now steady rise of citizen journalism, it is the latter that through professional channels can provide a richer and in some ways more objective view of the trends in this market.

As a final note I could not help but highlight a response posted on Property Talk when they discussed the blog post on the media – a contributor “leapy” from Invercargill made this comment in referring to the NZ Herald article penned on Monday reporting my post. And just for clarification I am not a real estate agent or the media unit of the Real Estate Institute, as incorrectly reported in the article.

Open your eyes people and see this for what it is. All the man said is that with the advent of internet technology a direct correlation can be tracked between negative media headlines and property website hits.

This entirely makes sense and really should come as no surprise to anyone. It’s fully accepted that news sentiment affects the the sharemarket on a day by day basis. Why not the property market?

Furthermore, shame on Granny Herald for the opening sentence of the article, which is completely misleading and not supported by comments made in the rest of the story.

Ironically – this plays exactly into the notion that the media is becoming more and more salacious in an attempt to generate revenue.

41

Media seriously impacts the psyche of NZ’ers when it comes to property

Posted on: May 11th, 2008 | Filed in Media commmentary, Website searching

Real estate as we are often told is the most expensive purchase you will ever make and one fraught with uncertainty and complexity – an industry turning over $34 billion in the past 12 months, transacted by over 16,000 agents. So why then would you imagine that the sentiment of these buyers and sellers could be so influenced by the media?

Well the fact is that as a function of the unique analytical capability inherent within the web this long held proposition that the real estate industry judges that the media impacts the state of the property market is in fact proven.

The view that rampant speculative buying is fuelled when headlines such as “House prices – the boom keeps rolling ” & “House prices still on rise” appear on our morning desk; and equally when the market is spooked by headlines such as “House sale low is sign the tumble has started” “Shades of the 80s in housing obsession” “Figures confirm property slump bedded in” & “Property market set to crash, says expert” pummelling the market into a nose dive when sales statistics reflect a slowing market.

Well now there are statistics to show that this is the case – well certainly on the downside impact. Analysing the web statistics of this website and several other specialist real estate websites (A total of 7 websites – portals and real estate company websites) produces the following graph.

NZ real estate web traffic 2006 - 2008

Most conspicuous is the manner in which the tracking of the aggregate of website visitors fell sharply from the 3rd week of February as seen by the red line representing 2008 to date. This steep tailing off is significantly out of alignment with the predicted seasonal trend shown in the preceding 2 years. This date of late February exactly correlates with the heightened media coverage borne of the January sales figures and the speculation as to the potential for a 20% to 30% correction in property prices.

With this staring point it is clear to see that interest in property started to wane. The key thing here is that these websites’ traffic statistics not only provide a “never-before” glimpse of the true activity of the consumer, but also a true litmus test of the market as the web has fast become the most valuable source of real estate information.

Adding to this supposition is the matched timing to a cooling off of new listings being added to this website from early March, this has resulted in the total number of listings featured on the site peaking at 109,000 and holding for the past 3 weeks. Were as in January and February the stock of listings was growing at close to 1,000 per week.

Listings stock on realestate.co.nz at May 08The likely factor behind these figures is the combination of property being withdrawn by agents and vendors who prefer to “sit out” this stage of the market, combined with owners reluctance to enter this market.

At the end of the day the question is – now that we know this, would we expect anyone to act on it?

The country would not benefit from restrictions of press. The media needs report the market and the facts – it simply needs to have freedom to print and publish what they want; just as this blog strives to provide a balanced and impartial perspective on the real estate market in its totality. In commencing this blog I strive to engage an audience. That is no different from newspapers and other media publishing articles designed with eye-catching headlines designed to catch the attention and thereby sell an audience to an advertiser.

I am just grateful that the consumer nowadays is benefiting from this more diverse media and in that context better able to make balanced judgements – this is an evolutionary trend of the web’s impact on all our lives – maybe in time these trends won’t be so extreme and rational behaviour will return to this most important of purchase decisions.

5

Auckland – key pointers to future growth and real estate opportunity

Posted on: April 23rd, 2008 | Filed in Architecture & Construction, Media commmentary, Regional News

The front page of the NZ Herald yesterday highlighted some telling indications of future sustainable drivers of the Auckland and NZ real estate market. For whilst we are in the midst of a seriously stalling property market, you have to look to the future to see where this market may be 5 years from now.

Proposed Westfield Tower downtown Auckland NZ HeraldThe lead article featured the artists impression of the proposed 41 storey office and retail development on the Downtown Shopping centre. This development coupled with the 67 storey apartment tower at the Elliot are being proposed by developers who are not novices to such developments. They are making proposals having spent many thousands of man hours and potentially millions of dollars researching the key drivers of demand in the commercial and residential market over the next 10 to 20 years – their verdict is clear. Auckland is growing and will continue to grow, as a consequence it will need places for people to work and places for people to live.

Adding to this list of new progressive looking developments is the latest proposal for a harbour tunnel to provide the solution which is so desperately needed, to solve the traffic issues of Auckland. This proposal following hard-on-the-heels of similar proposals foretell the likelihood of a second harbour crossing actually being built in our lifetimes. Again the sustainable drivers of a growing population and growing economy in the longer term more than justify this likely multi-billion dollar investment.

Alex Swney Heart of the cityFurther adding to these future developments was the excellent piece penned by Alex Swney celebrating the completion of the 5 year refurbishment of Queen Street as the epicenter of Auckland’s retail and commercial heart. As CEO of Heart of the City and passionate Aucklander (as well as mayoral candidate) Alex has admirably championed the vibrancy and vitality of this precinct and made what was once a dark and dull “bitty” shopping and working environment into a bright and interesting metropolis. The proof to this regeneration and vibrancy as Alex says is best reflected when you:

“..talk to any realtor and they will tell you of the heightened level of interest from major international brands to secure Queen St space as it boasts pedestrian counts up to 10 times higher than any other high street in the country, underpinned by 80,000 workers, 70,000 students and 20,000 residents.”

As Alex says Auckland is growing up, it is no longer the difficult adolescent, highly self conscious; it can mix with the best in the world as a center of business and lifestyle.

In terms of the assessing the future have a look at the initiative set up by the regional council entitled “Auckland Plus” designed to articulate the business proposition for Auckland. This is the showcase of how Auckland can and does promote itself in the business of cities fighting to attract talent, capital and business to grow the future economic wealth of this city and this country – a highly competitive arena in which to compete.

The future of NZ is inextricably tied to the future of Auckland and from these developments we can start to see the other side of this current economic and real estate slump, a side that is based on sustainable drivers of economic growth which always have a flow on effect to real estate.

5

Mortgagee properties – interest grows in this challenging market

Posted on: April 9th, 2008 | Filed in Media commmentary, Real Estate Industry

In what is becoming a regular report on the consumer interest in properties featured on this website that are the result of mortgagee sales, I can tell you that last week represents a significant increase in awareness and interest. I suspect that a lot of the resultant spike in activity is a bit of “self fulfilling prophesy”.

Compared to the last 4 week average of around 1,000 keyword searches we had 3,431 keyword searches last week for the collective group of “mortgagee”, “mortgagee sale” and “mortgagee sales” – in total this group of 3 key words represented just on 13% of all keyword searches – one in 8 of all such queries.

In the same vein as the fact that this searching could well have been influenced by this blog, Bernard Hickey’s blog and TV3’s John Campbell article – the real estate agents would appear to either be finding more mortgagee properties to list – or as is more likely adding this keyword to their existing listings.

The number of properties on the website using the keyword of mortgagee has risen sharply to 174 from 154 last week.

Underlying all this is a key indisputable fact that whilst property sales are falling sharply (the next 7 days will likely show sales below half their levels of a year ago and a market heading for annual sales below 75,000) the website interest in viewing properties has not fallen. Quite the reverse weekly traffic is up around 12% compared to last year at this time with over 120,000 sessions served in the past 7 days collectively amounting to over 22,000 hours on the site!

21

Will we see property prices rise before 2018?

Posted on: March 27th, 2008 | Filed in Buying / Selling a home, Media commmentary, Real Estate Industry

The opinion piece posted by Bernard Hickey on the Interest Rates blog yesterday titled “Don’t expect capital gains until 2018” has certainly captured the interest of main media and the public at large.

The premise of the article, which is well worth reading takes the position that affordability criteria sets the long term property pricing trend line. We are currently well off this line today. The likelihood is that unless unforeseen circumstances intervene it is unlikely that NZ property will re-attain their peak median price ($352,000) again until between 2018 and 2027 – a staggering 19 years at the most pessimistic!

Now I do not profess to be as close to the financial markets as Bernard, however I do consider myself sufficiently well read of the market factors today as well as being well positioned to see the trends in the real estate market through the website. I have also witnessed property markets falls – specifically having owned property in the UK in the late 1980’s.

The fact is whilst I completely agree with Bernard as to the reasons behind the current state of the market, the underlying drivers that have got us here and the factors weighing heavily on the future trends; I at this point tend to take a different view of the long term outlook. Whilst I cannot see any great silver lining on the billowing dark clouds ahead, I do not see such oppressive blackened overbearing clouds for the next 19 years!

Here’s my take on this situation:

To view the market as a homogeneous group is to over simplify, equally to segment the market too finely can lead to bias and misrepresentation, however I hope to make a point by doing a degree of segmentation.

Let’s for a moment look at the motivations of differing groups in the property market today.

1. For those that purchased their properties as a home to live in pre-2005, then a sale in today’s market or even next year’s market in the face of falling prices will only see them lose a paper value of their home. Should circumstances change for these people and they have to move house and sell; they could justify selling at what might appear to be a “paper loss”. These people are more likely to stay put and ride out what they see today as a storm – why sell?.

The net result for this group will be less people selling their home.

2. For those that bought between 2005 and 2007 – for these people I would suggest that they are pretty concerned and to some extent extremely worried as to whether they paid what now might amount to a too higher price for their property. They may be worried that the value of their “asset” may actually be worth less than their mortgage. For these people a psychological phenomenon will kick in where logic says sell now (to at least realise some net gain) however the reality is that they do not sell because they deny the reality of the situation and feel the urge to stay – this is what happens with shareholders that start to see stock prices fall, but for property this scenario will be compounded by the fact that a home is more than just a financial investment.

The net result of this is that this group of people will not sell their home unless driven to by extreme circumstances such as financial hardship.

3. The other group are people who are cashed up as investors looking to buy-to-rent or people who sold in the last 6-12 months and are now more cautious about buying, as well of course first time buyers. These people whilst less motivated to buy than a year or so ago will be keeping close tabs on the market. They will not be adding to the stock of houses on the market; equally they will not be taking properties off the market by buying property.

These 3 groups whilst not the most exhaustive set of players in the market would represent a a significant component of the market. The net impact of their actions will be to significantly reduce the stock of properties coming onto the market and equally significantly reduce the demand side of the market buying up properties.

As a measure of the skittishness of the market our website has seen a steady increase of properties being added at the rate of close to 1,000 per week taking the current stock of just homes for sale to over 65,000 from the total site inventory of 107,000. This represents a inventory of close to 12 months based on current sales level – this stock level will fall. Not as a consequence of sales, but as a consequence of the reaction of the groups above as they pull back and hunker down!

I would expect to see that in the next 6 months (especially heading in to winter) a continuing fall in sales volumes – this full year to around 72,000. A significant fall from the heady days of 2003 at 120,000+ and a level not experienced since 1993.

Prices will fall – we could well see median prices down from the current $337,500 to around the $300,000 mark. The big issue here is that with declining sales the median price point will become more erratic especially at a local area level where with small sales volumes individual sales skew the figures. We may well see some very inconsistent swings in prices. Compounding this will be the fall out from the speculative investment property sector collapse (Blue Chip etc.) This will drag median prices down as the majority of these properties are sub-median priced. This outcome could occur without any change in the average price for most of the rest of the market.

As caution slows demand and the “ride out the storm” mentality dries up listings; sales volumes could well fall to a level where a new state of equilibrium is reached and the market responds with supply meeting demand and the pricing logic kicks back in as people always need to move for a whole host of reasons. House purchasing is a naturally liquid and dynamic market and cannot be likened to other bubble markets (stock markets, tulip bulbs, precious stones), they cannot dry up. Homes are just that; a home – one of Maslow’s 3 primary needs and as such reflect genuine demand for a roof over our head either as a rental property bought to rent out to meet a rental demand or a house to live in.

The view that we will see a stagnant property market for near on 20 years is for me too close to pure economic theory of straight line graphs, and too far removed from reality – we live in a global connected world and a global economy with enormous mobility and liquidity – too much of the global economy relies on financial service which themselves rely on property as a key investment source for the property sector to stagnate. Don’t get me wrong – the future is not bright – but to say we are all going to have to wait 10+ years before we can move house to enjoy capital gain is for me a hard pill to swallow – it may well be a more traditional 3 to 5 cycle of which the remainder of 2008 & all of 2009 are not looking that pretty.

41

NZ’s Property slump – compelling facts cannot be ignored

In the past on this blog I have accused the media in general of self serving sensationalism when it has come to reporting the state of the property market in NZ, and the likely path that this market will take in 2008.

sst-headline-2-mar-08.jpg

Well now is the time to come out and say congratulations to Esther Harward, the feature writer of today’s headline story on the Sunday Star Times entitled “Snapshot of a Property Slump“. The article is balanced and factual, it is unemotional and as someone who has been paying close attention to this market place and commenting on it on this blog in posts such as “Will 2008 see house prices rise or fall?” “Is NZ facing an impending property crash?“, I can say I agree 100% with the article.

NZ is in a property slump. That word is well chosen – it is balanced.

We are not in the midst of a crash. We will likely see a more subdued market than we have witnesses over the last 5 years. Some properties in some areas of the country will experience price falls. Others will be able to hold a steady price at a much slowed sales pace; whilst as the article states others will be havens of opportunity which may well see some inflation pegged growth. The net impact of all this through the year will be shown in the aggregated median price and total sales both falling – the article estimates prices by as much as 10% – that is possibly quite likely; taking last months median price down from $340,000 to around the $300,000 level – the kind of levels last seen in early 2006.

The NZ property market is not one market but many thousands of markets, each with their own characteristics, drivers, demands and appeals. However all are impacted by universal issues such as mortgages and the economy. The latter is becoming more critical every day as rates continue to rise. The Reserve Band is currently hesitant as to whether to hold these high rates and risk the dollar’s spiraling appreciation and consequential “crash landing recession”; or whether to loosen rates as the US is currently doing and in so doing allow inflation to become unchecked. A tough call as ever for Alan Bollard.

2

The Joneses (part 2)

Posted on: February 20th, 2008 | Filed in Media commmentary, Real Estate Industry

I am personally surprised by the lead article on the Herald today titled “Joneses had loss of $6m on books“. The articles quotes Brian Gaynor – a regular contributor to the Herald with the following comments:

He issued a commentary on the collapse, saying the liquidation should give a clear message that entrepreneurs had to take a long-term view when contemplating listing.

He also criticised the role of independent advisers who had valued the company, raising questions about the report prepared by WHK Corporate Finance on January 30.

What surprises me is what is the big story? – this reverse listing was supported by a detailed prospectus and analysts report to which he refers. This was public information (I got a copy) – anyone proposing to invest would have received this information and made a judgment as to the risk in investing. For Brian to say “entrepreneurs had to take a long-term view when contemplating listing” is a little bit stating the obvious, that is why they are entrepreneurs.

Also in making a headline of a “$6m loss” and saying $3.2m had been spent on marketing as if this was inappropriate – their business model needed heavy up front investment – this is what they did, pretty clear I thought.

I also don’t think there is any grounds to criticise the analysts, they put a future value of $14.4m – it was a future value based on future sales and revenue and to criticise them for that is a bit illogical.

35

Is NZ facing an impending property crash?

Posted on: February 17th, 2008 | Filed in Buying / Selling a home, Media commmentary, Money Matters, Property Investing

As has become the norm over the past 12 months the newspapers and TV are cluttered with articles prophesying impending doom as NZ property teeters on the brink of a property collapse – the questions is – are the reports and prophecies going to become self-fulfilling or is rational sanity going to prevail?

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istock_000002397981small.jpg

The facts are very clear, the property market has slowed significantly and prices are not rising as fast as we have been accustomed to over the past 2 or 4 years. However it is a fact that over 5,000 properties were sold in January so clearly there are people looking to make that step and buy property, equally there are over 57,000 properties currently advertised on this site (There are currently 53,300 homes and 9,600 lifestyle property listings on the site, within this are multiple listings of a single property as properties being sold by more than one agent are advertised separately) – clearly this indicates that there are sellers looking to move for whatever reason.

It is a well known fact of any market, be it property or shares or any commodity that in-spite of the trend there will always be buyers and sellers entering the market for differing reasons, it just may well be that the current property market is more interesting to seasoned professional investors with ready finance who are keen to seek bargains rather than a year ago when it was more likely to be less well informed opportunist seeking to “jump” on the property band-wagon.

A couple of articles have sighted the rise in the listings of mortgagee sales on websites, this is true for realestate.co.nz. Currently we have 100 properties featured as “Mortgagee Sale” – a year ago we had 63. Does that mean that we are seeing a 60% increase in the prevalence of mortgagee sales? – there is no statistical proof. Mortgagee sales happen all the time for many reasons and whilst there is no doubt many property owners (not necessarily home owners as the properties concerned may be speculative investment properties) are suffering under increasing debt it is not close to the scenario in the US. The situation in the USA was driven by the most lapse of financial systems and fueled a mega-surge in new property development which is mostly where the pain is being felt right now.

Rather than look to the US for the prediction of where the NZ property market might end up, I think it is better to examine the UK market as the picture there is surprisingly similar to NZ – possibly a few months ahead of us.

UK house prices fell for the third month in January by 0.1% to 180,473 ($451,200) (as stated in a recent Bloombergs report), however they still show a 4.2% increase over this time last year (NZ year on year prices are up 3.97%). Already interest cuts are being predicted of between 0.25% and 0.5% over the next 6 months as the credit crunch has impacted on the economy as a whole and property in particular.

Despite this situation, the UK market is predicted to see prices to drop by around 5% in 2008 – a realistic picture given credit tightening and the current trends. This I would judge to be a rational prediction rather than the NZ snake oil merchants parading as property market experts who talk of 25% falls in prices. The UK property market is underpinned by the same foundations as the NZ market – their economic outlook remains strong, demand for property far outstrips supply and they have low unemployment. Just last week the Royal Institute of Chartered Surveyors stated :

“In the near term, the housing market will continue to be shielded from significant price falls while employment conditions are strong”…”if mortgage lenders filter the recent interest rate cuts into the market, demand should begin to increase”.

For NZ we face continuing high interest rates, it is unlikely that we will see cuts in these rates until the 2nd half of the year when there will be a fierce competitive battle again as large component of fixed term mortgages come up for renewal, this however will be in the middle of the election campaign which traditionally is a slow time for property sales.

So as ever interpreting all this information is difficult as just with Lotto if we knew the future we would win every week! – however it is realistic at this stage to say that the indications are for a very slow property market in 2008 – sales well down on 2007; with the likely hood of property prices of property ending the year at or just below the levels today.

12

NZ Property – the least affordable in the world?

Posted on: January 22nd, 2008 | Filed in Media commmentary, Money Matters

There is nothing like an alarmist headline to sell newspapers! – and this one today was certainly right on the money, shoving Sir Edmund off the stage.

So is it true that we live in the world’s most expensive country where we pay the largest percentage of our income on property as the headline would make you think?

affordability.JPG

I decided to have a read of this report – 4th Annual Demographia International Housing Affordability Survey – 52 pages of detailed analysis and statistics; and as we all know those damned statistics can be portrayed to paint many a varied picture.

So image my surprise when I discovered the following facts of this report:

1. It is not a report of 6 countries property markets as the headlines claim – it is a report on 227 individual property markets, which in scale terms are mostly as big as or bigger than the whole of NZ

2. NZ is not the least affordable country (or aggregate of collective markets) – it is equal with Australia at a multiple of 6.3 times median price to median income, UK is 5.5, Ireland 4.7, US at 3.6 and Canada at 3.1

3. Using this multiple scale of median price to median income across these 227 markets, the report sets out the markets in ranked order with Los Angeles the most unaffordable (so much easier than saying “the most least affordable”!) you then step down through 5 US cities including San Francisco and San Diego before you get to the first non-US city – coming in at #6 Mandurah in Western Australia at a multiple of 9.5! Then descend through markets in the UK, Australia, Canada and more of the US until you get to 20th place at a multiple of 7.5 – Tauranga. Auckland comes in at 31st place on 6.9, Christchurch 34th place at 6.6 and Wellington 46th place at 6.1.

Now does this really point to us living in the most expensive country in the world?

So what does this report tell us really (as opposed to what the newspapers want to tell you). Well first off this report has an agenda which to be fair they do not hide. The authors actively and passionately believe that restrictions on land use on fringe land adjacent to cities should be freed up to allow for the ever growing expansion of cities. This theme is neatly segued by the former reserve bank governor and former leader of the National Party Don Brash who writes the forward to the report – naturally bringing the government to task for putting blocks in the way of such needed progress.

On a less political point of view the report really tells you what you already knew – the laws of supply and demand. If you create demand through economic growth in a market, this sucks in companies which suck in workers, this demand puts pressure on housing stocks and if you apply constraints on new supply of land and property then the solution is increased prices. If income wealth distribution does not significantly change then the median income does not budge and property looks to be more and more unaffordable.

Where is the evidence of this? – look no further than the top 10 of most unaffordable markets – West Australia (mining explosion), San Francisco (tech explosion), Bournemouth / Brighton (tech explosion and London exodus).
Equally look at the top 10 most affordable markets in the survey and low and behold you see the former rust belt of the US and the remotest parts of Canada (Canada has an Invercargill as well!) – places where either people are leaving in droves or people never came.

Can anything be done about this unaffordability in NZ? – simply put no, we live in a more and more global world market for property where talent moves to where the opportunities to work and enjoy life are rich and plentiful. With this migration of people follows money and companies, with this comes the pressures and demands on property, especially as in absolute terms NZ property prices are still cheap when compared to main global centers such as London, New York, San Francisco, Sydney, Singapore, Hong Kong etc.

This was the strategy espoused by Professor Richard Florida in his book “The Rise of the Creative Class” – basically you cannot stand against a tide of change, for NZ the skill is in harnessing the talent and wealth that comes with our natural attraction for this new immigration and build a lasting and vibrant economy and community in our unique part of the world.

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