The housing bubble is inflating faster than ever:
Auckland’s average house price will hit $1 million by next year
Quotable Value figures issued figures for the last three months, showing prices were rising at their fastest rate since 2004.
Auckland house values shot up 4.7 per cent in the last three months and 16.1 per cent since last June, reaching a new average of $975,087.
And the driving force behind this frenzied rise?
Investors were also hungry for more properties too, she [Andrea Rush, QV national spokesperson] indicated. “The latest CoreLogic buyer classification data has show that the share of sales to investors has gone from 37 per cent in 2012 and it’s up now to 46 per cent of investors,” she said.
Those investors appeared to be buying in advance of further Reserve Bank crackdowns, she indicated. “Investors are trying to get in as conditions are currently,” Rush said.
If prices stay this high (or keep going up) it’s a disaster for National. If the bubble bursts and prices come down it’s a disaster for National. Key is between a rock and hard place, and his panic is now obvious:
Whiff of crisis in the air as Key calls for central bank help over housing
House prices are rising faster than the Government wants. Not just in Auckland. Almost everywhere but Christchurch. … Scatter gun initiatives have been coming at the rate of about one a week for months now, the latest being a $1 billion loan facility to help local government build new infrastructure. No sign yet, though, that ministers are ready to abandon their ideological bunker and directly fund some affordable private homes.
It was, he [Key] said, the “responsibility” of the Reserve Bank to look at extending the current loan to value ratios imposed on investors, which generally require them to stump up a 30 per cent deposit in Auckland. Should LVR restrictions be extended across the country or lifted above 30 per cent for investors? Key said “yes”. And not just sometime. If not Thursday, then at least sometime soon.
The Government may not be ready to admit there is a crisis in the housing market, but it sure looks like a crisis in its own ranks.
It is all looking very messy. Panicky in fact.
Yes, Key is now actively begging the Reserve Bank to do his job for him.
The political problem for Key is that the Nats are simply unable to take the actions required to actually address the crisis. They are ideologically opposed to some (significant curbs on speculators, capital gains tax) and appear to be simply incapable of others (build some damn houses!). The electoral problem for Key is that Labour are going to offer what the country needs – stay tuned this weekend.