The optimists would point to the first six months worth of mortgage figures for this year and say the figures show a recovering housing market.
After all, the $32.808 billion borrowed in the six months ending June 2024 is up a healthy 15% on the figures at the same time last year.
This is as calculated from the Reserve Bank (RBNZ) detailed monthly mortgage figures that have now been published since 2014. (The first full year of publication was 2015).
In addition, if we look at numbers of mortgages committed to, the figure for the first half of this year is 89,709, up 11.2% on the same time a year ago.
So, all well and good then. Except...the figures for the first half of last year were the lowest since the data series started.
And it gets worse.
In 2023 the figures towards the end of the first six months of the year were on the improve after a simply deadly start to the year. THIS year the figures are tending to go the other way.
In terms of numbers of mortgages taken out June 2024 saw the lowest number (14,590) for a June since this data series started - and down 6.2% on the figure for June 2023.
Looking at the various high frequency economic indicators bouncing around, June does appear to have been a truly horrible month for the New Zealand economy. And that has been reflected in those June mortgage figures.
Here are two tables that summarise the mortgage market activity for the first six months of this year, and compare the first half of this year with the previous years.
I've used a six-year timeframe to include 2019, the last 'normal' year before the Covid. Enjoy:
| Share of new mortgage money - first six months of the year | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First home buyers (bln) | % of total | Investors (bln) | % of total | Other owner/occup (bln) | % of total | Total borrowed (bln) | ||||||||
| 2019 | $5.549 | 17.4% | $5.860 | 18.3% | $20.224 | 63.2% | $31.981 | |||||||
| 2020 | $5.339 | 18.5% | $5.855 | 20.3% | $17.403 | 60.2% | $28.905 | |||||||
| 2021 | $8.966 | 17.8% | $10.370 | 20.6% | $30.571 | 60.7% | $50.381 | |||||||
| 2022 | $5.339 | 17.8% | $6.376 | 17.6% | $22.993 | 63.4% | $36.240 | |||||||
| 2023 | $6.454 | 23.0% | $4.767 | 16.7% | $16.777 | 58.8% | $28.522 | |||||||
| 2024 | $7.226 | 22.4% | $6.077 | 18.5% | $19.009 | 57.9% | $32.808 | |||||||
*(Please note that neither this nor the other table further down the article include the fairly small amounts of borrowing 'for business purposes' in the break-out figures so therefore the figures seen for the first home buyers, investors and other owner-occupiers don't exactly add up to the 'total' figures seen, nor do the percentages add up to 100. Percentages are rounded).
| Share of mortgages by number - first six months of the year | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First home buyers | % of total | Investors | % of total | Other owner/occup | % of total | Total mortgage numbers | ||||||||
| 2019 | 13,593 | 10.2% | 17,143 | 12.8% | 100,651 | 75.4% | 133,468 | |||||||
| 2020 | 11,867 | 10.7% | 15,643 | 14.1% | 81,553 | 73.7% | 110,590 | |||||||
| 2021 | 16,792 | 11.0% | 21,358 | 14.0% | 112,909 | 73.9% | 152,734 | |||||||
| 2022 | 11,104 | 12.2% | 11,660 | 12.8% | 66,898 | 73.5% | 90,997 | |||||||
| 2023 | 11,845 | 14.7% | 9,750 | 12.1% | 57,695 | 71.5% | 80,645 | |||||||
| 2024 | 13,136 | 14.6% | 11,823 | 13.2% | 63,177 | 70.4% | 89,709 | |||||||
So, what do we say about the first six months of this year in terms of mortgage borrowing? We can say it's better than the first six months of last year. But, obviously as said above, we can also say the first six months of last year were particularly dire in terms of activity.
As also referred to above, activity tended to improve as the year went on last year. For the whole of 2023 over $62 billion worth of mortgages were committed to. While the first half of last year was the slowest since this data series started, the whole year was NOT, thanks to around $33.5 billion of mortgage commitments in the second half.
A significant factor in play a year ago though was the anticipation of the forthcoming election - and the expected election of a National-led government that was pledging to remove some of the Labour introduced measures that went against investors, such as removal of interest deductibility for them.
Indeed with signs of activity ramping up in the housing market as we headed for the election, economists were talking of likely reasonable rises in house prices this year. However, those forecasts are progressively being wound back at the market loses steam in the face of still high interest rates and a slowing economy.
Second half worse than the first?
So, just looking at those six month figures, it's not beyond the bounds of possibility that this year the second half could be worse than the first.
The crucial factor will be when and if the RBNZ starts to cut the Official Cash Rate (OCR) from the current 5.50%. Economists expect cuts sooner rather than later, with November now seen as probably the latest time at which cuts might occur. But the RBNZ will definitely keep its own counsel on this one.
We've already seen banks making some mortgage cuts in anticipation of expected OCR cuts - and in recognition of lower wholesale interest rates. But it's probably going to need more to cause a lift in housing market sentiment. And it's hard to see the banks cutting much more from here before they've seen some actual OCR cuts.
So, don't be too surprised if the housing market stays pretty flat in the second half and mortgage figures are possibly somewhat lower than they were in the first half.
Anyway, to finish off, I'll just go through some of the points of interest in the figures for the first six months of this year.
When looking at the amounts of money borrowed, we have to consider the impact of rising house prices on mortgages sizes. For example, in the first six months of 2019 the average sized mortgage was a little under $240,000. By the time of the first half of 2022 this average figure had soared to over $398,000. In the first six months of 2023 the average had eased back to nearly $354,000. In the first six months of 2024 this figure's risen again to $366,000. These figures are all rounded.
One of the key features of recent times has been the rise from very low levels of participation by the first home buyers (FHBs). Going back to the early days of the RBNZ's mortgage data series the FHBs on occasions had an under 10% share of the mortgage money, while at times the investors had as much as 35%.
The trend paths of the FHBs and investors have very much crossed in the past couple of years. But there are some signs from the latest figures that these trends may now be ready to reverse again.
The FHBs may have peaked
Note that the FHB grouping enjoyed a record high share of the mortgage money in the first six months of last year with 23%. In fact on a monthly basis the FHB share hit a record high of 25.2% in December of 2023.
Recently though the FHB share looks like it might have peaked. For the first six months of this year it was 22.4%.
Investors fell a long way but are, not exactly bouncing back into the market, showing some signs of renewed interest - although I should stress that the investor figures weakened in terms of share in both May and June. So, will the upward movement prove to be a blip?
For the first six months of the year the investors took an 18.5% of the mortgage monies, up from a nadir of 16.7% over the same period of 2023.
However we look at the latest six month figures overall though, the overwhelming impression is of a housing market bouncing along the bottom.
It will take meaningful interest rate cuts to kick start it again it appears. And even then in the short term this might not be enough if the economy continues to languish and the unemployment numbers keep moving up.
*This article was first published in our email for paying subscribers early on Friday morning. See here for more details and how to subscribe.
104 Comments
'Investors .... showing some signs of renewed interest..'
At some stage it should sink in, like it is doing elsewhere. But not in New Zealand! We're different...
"Being a private landlord in Britain no longer makes financial sense"
https://www.telegraph.co.uk/business/2024/07/27/private-landlord-britai…
"NZ prefers to learn the hard way.."
Most people choose to ignore the lessons of history. Look at the multitude of real estate price crashes throughout history and the collateral damage on owner occupiers. Here are some off the top of my head:
1) Japan 1990's
2) US 2007
3) Ireland 2007
4) Hong Kong 1997
5) Singapore 1997
6) Russia 2006
7) Kazakhstan 2007
8) Cyprus 2008
9) Spain 2008
10) Italy 2011
11) Saudi Arabia 2014
12) US 1930's
So 650 k mortgages total, in 6 x 1/2 year period, say 1.3 million mortgages drawn in the full 12 months x 6 years, of a total 2 million housing stock , thats a hell of a lot of churn isnt it, 2/3 thirds of total stock , mor or less got financed or re-financed in 6 years?
Can't New Zealanders find something more productive to do with finance ,than churn the housing stock over and over?
Friggin hopeless.
There's only one reason it happens - because we allow the banks to do it.
As a start change the Lending criteria for secondary properties; make the banks hold much higher capital against any such lending, and with any luck they will lend to other, more productive, areas of our economy. Chance of that happening? Zero.
"As a start change the Lending criteria for secondary properties; make the banks hold much higher capital against any such lending,"
Another way to give priority to owner occupier buyers in the existing house market is via tax treatments between different categories of buyers. Here are current tax rules in Singapore:
https://www.iras.gov.sg/taxes/stamp-duty/for-property/buying-or-acquiri…-(absd)
People move house because they want to move - to upgrade, to get into school zones, to be closer to work, to downsize, to move towns, etc. The average hold period is 7.7 years. Who wants to be locked into being forced to live forever in the first house they buy? We should be glad that it is easy and relatively low cost to be able to move house, not seek to impose restrictions on it.
Other countries lock buyers into staying in unsuitable housing because of the costs of stamp duty (Australia) and cheap fixed mortgages (USA) and there are many studies that show that this reduces the mobility of labour and consequently productivity. It also increases inequality as poor areas continuing to decline while wealthy areas become wealthier.
Go back a generation and tell me what the hold period was. That figure above might not be a true representation due to the speculative capital gains house flipping era of the past 20 years.
That's a weird projection that anyone is locked into being forced to live forever in the first house they buy? We haven't made it low cost to be able to move - we've made it high cost just to have a home.
Maybe the crux of the matter is that human beings are a social species/herd animal and it's in our inherent nature to have social and lateral mobility. Maybe we need the freedom to just move sideways or lower. Could it be that the construct of upward mobility and "economic" productivity as measured by $$ is what forces us to be and do, and against our inherent nature? Could it be we weren't designed to be expending all our energy to own homes?
Good article. If you want to see a graphical version of that mortgage money creation, click here. The figures are for net mortgage money creation (new loans minus repayments) and are adjusted for inflation. This is one hell of a slump.
Our floundering fish of a housing market doesn't bother me per se. However, our economy is our housing market and the chilly auction rooms and empty open homes have a real world impact. With no new money flowing into the economy, businesses can't generate a surplus and jobs are disappearing fast.
Hopefully this episode will properly expose this fundamental flaw. We have become totally reliant on a net flow of mortgage credit money of around $40m per day. That is what enables businesses to make profits and households to save etc. When the flow slows or stops, everything goes to crap. People think that our housing market moves with our economic cycle. But it's the other way round!
"our economy is our housing market" Quite right. But allowing our banks to sustain that will be the path to more of the same.
We have to change our economic model. It's only a matter of whether we do it ourselves - painful though it will be, or someone else does it for us. The most benign of them being the IMF.
The IMF would prescribe austerity and deregulation - more of the same. At least we would get a capital gains tax - but in a continous recession those gains would be minimal.
We need industrial policy - a 20-year electrification project would be my choice with an explicit goal of energy and food sovereignty. Make it a national mission with a job for anyone that wants to help.
I believe we are heading towards the IMF because no govt will have the balls to do what’s necessary, the current model is completely unsustainable and has now hit the wall. The IMF will bring in competent, objective technocrats who will dictate the changes that must be made as preconditions for release of funding, the population will squeal but it will get done and we’ll be better off after after the pain subsides. Ireland 2008-12 is a great case study
We need a whole new way of getting money to flow through the economy.
There's no point leaving the tap on if we're not addressing the dams and leaks. One of those leaks is the source and origin of credit creation being in corporate control. We can't trust it in the hands of politicians and the people are too divided and ill-informed to be responsible. How do we address this? Of course one could say the system has been designed that way, and a new design is required. A whole lot of beliefs have to collapse too though and I don't see that happening.
I don't think we're able to see past our own hubris and accept that our own intelligence might be lacking.
Without more new Debt, this country sinks into the Pacific. As JFoe writes above, new Debt is the liquidity; the Life Blood of the economy we have made for ourselves. And we now only have ONE asset class that banks will lend against - property. Be that for its own sake or the backing for any new business.
The problem is it's unsustainable. There simply aren't enough buyers to keep prices high or building more houses.
- our Nz population is declining birth wise
- the skilled next generation are leaving already due to poor standard of living and expensive housing.
- we can't attract high skilled young immigrants for the same reasons our own are leaving. And there is no point importing low skilled immigrants who just can't pay enough tax for the services they consume nor afford housing they are already stuffing our rates bills.
We simply have to stop the house buying/ selling / building merry-go-round. Accept the reality of our financial position and get through the inevitable slump..minimising it but putting massive energies into developing different economic engines.
The problem is it's unsustainable.
But it is sustainable if you have a steady demand for credit creation.
Where the West seems to differ from Japan is that even with low cost of debt, the Japanese have been reluctant to take on debt. That is entirely different to Aotearoa, Australia, Canada, and the US. Lowering the cost of debt excites us and signals the opportunity to spend like drunken sailors, even if that means just bidding up prices on existing housing stock.
Perhaps there's something behaviorally intuitive going on - that people instinctively know that borrowing today is good because they believe the nominal value of our money is being decimated.
OK you post a lot of links I do not read but I am glad I read that one. I suggest others here do as well, its a great write up of how the banks are motivated to lend more into real estate then other loans due to the risk weighted asset calculations and there own internal models.
Its written in a way most will understand vs normal discussions.
Basically what it shows is if the economy wants to pivot away from real estate (ie lend into non real estate), either the banks are going to have to raise a lot more capital, or the risk weightings will need to change. Problematic for little NZ. How much, as a bank can lend its capital at a ratio of about 6 times to RE vs unsecured, if we want to pivot the banks would need MULTIPLE times there current capital.
I see the base problem for any economic pivot is that assets of all types are overvalued, even in farm and orchard, fishing quota etc, assets are really expensive.
I think the way forward, said it again and again, is to setup a Fannae Mae Freddy Mac type system, for owner occupiers. BANKS AND LAWYERS ETC COULD FINANCE LANDLORDS.... The big banks would get much smaller overnight... but would be forced to pivot to commercial and institutional structures again. If you look back at the history of why the US set up
Fannie Mae was first chartered by the U.S. government in 1938 to help ensure a reliable and affordable supply of mortgage funds throughout the country.
Its the Rescue plan, because if NZ property overnight became as affordable as say US property, it would wipe out the banks existing capital... (ever tried margin trading at 60:1....), people are leaving NZ because its not even as affordable as regional Australia.
This solution is not going to voluntarily happen but its good to have a Plan B so that we can pick up the pieces.
We are talking depression level crisis planning
It would need a credit vehicle to do that, the options are rescue AUSTRALIAN Banks, after perhaps nationalisation, or setup something akin to the US solution during the great depression. If you have just screwed up so badly the rescue cannot be do the same thing again....
You know what? Decades back, when this country was making itself into a developed economy, businesses didn't have property to pledge to borrow against. Banks lent against the business opportunity as they assessed it. And it worked. Businesses and jobs got created. Working families were established. But banks got lazy, when all they had to do was take residential property as collateral. The risk was spread over a million properties, not just a handful of businesses. That's what has to change.
"Credit is always accessible if you have a solid business opportunity that stacks up."
A business might be financially viable with financing costs at say 7% (i.e mortgage over existing residential real estate) but not financially viable at financing costs of 16% (i.e unsecured business lending)
Most businesses want the lowest cost as possible for the business in order to be profitable and cost of financing is no exception.
Some business owners are learning that their business was viable when they were able to borrow at 2-3% cost of financing (using residential real estate as collateral) are now learning that the business is unviable at cost of financing of 7% (using residential real estate as collateral) - the business activity is negative cashflow at that cost of financing.
Is the bank not then shooting itself in the foot by lending more and more to residential real estate? For example: if the price of housing, for an extreme example, got to 15-20x median wage, then there would be even further concentration of wealth by those who currently already own several properties amassing even more properties while the prices were rising, which, over time would drastically lower the level of credit creation by less people taking on mortgages and more landlords leveraging more and more equity.
Running a business based on the expectation of continued low financing is a rookie error.
The owner needs to make their businesses more efficient and productive or find other ways to grow it.
An expectation that a business can only grow with low interest rates is insane.
Nz businesses have very low productivity vs oecd norms. We hear it again and again... and it's largely driven by importing low skilled cheap labour and by borrowing cheaply. The only solution in the long term is to grow by improving productivity like the rest of the world.
I have business loans secured against the business. I don't own property. We are a small business with a line of credit of 1.2m roughly 20% of our turnover. Interest cost averages at around 9%. We use credit for roughly 6 months of the year being very seasonal.
It is possible, but it took me 8 years to get anything out of a bank, I couldn't even get a business credit card initially. We were with ANZ, they were beyond useless, been with kiwibank for last 5 years, having access to capital has allowed us to grow, employ more people and become more resilient.
" The housing market 'recovery' fails to launch "
"It's not possible!
...Noo, It's necessary."
You cannot argue with the numbers, lending has hardly fallen off a cliff has it ? I would expect the last 6 months of this year to be pretty bad but we will not know the actual numbers until summer and by then rates will be down. This will be as hard as it gets for most people right now, the whole thing was engineered and we knew it was coming well over a year ago now. I see some people have not been able to weather the storm and drop their lifestyles so the shit has hit the fan for them, but most will make it through.
by Zwifter | 19th Jun 23, 6:36pm "ACT/National government from October and then Summer so the positivity will be on the rise"
On one thread you explain how people are going to be in for a shock upon fixed interest rollovers then on another you underestimate the delayed economic impact higher interest rates altogether by pointing out August to October 2023 was the last opportunity to buy a "cheap" house! Now, look at your comments today?
Unemployment is still rising and is expected to continue rising for most of 2025. Many of those still in jobs are feeling insecure and less inclined to borrow and spend going forward. They've seen their work peers/friends family members get laid off.
Lower interest rates - sure, they will provide welcome relief and recovery over time but not the lightening asset price recovery Spruikers such as yourself are dreaming off.
The market may launch up again, when mortgages are written below 3.5%.
Untill then, it's "watch out below"
NZ property junkies will need a hellava lot of methadone, to deal with the next few years of painfull falls/withdrawals - as the decades long party, of cheaper and cheaper money, are finished!
I wonder what % of real estate lending is in actual fact being used for business purposes, just loaded that way as enough security exists for the the bank to be able to do it...
Basically in a falling market this % tap is turned off, as JFoe says, its significant ... and we will not recover until alternate funding can be found. Housing falls far enough and its going to get real interesting.
Indeed.
And it's why we have to get back to lending to businesses based on their business case. Not "Here's the cash, and if it doesn't work, we're taking your home".
The current economic model we are using is past its use by date, by a long way. As the last one was, and the one before that. So what did we do in each case? Changed it. We scrapped rural subsidies; we floated the exchange rate, and we brought in CPI targeting. Each time a different approach.
And that's what has to happen now - we have to change our economic lending model.
BW - the only institution who can fund cheaper then the Banks is the Government.
Selling Kiwibank now is probably smart, it cannot compete, and adding funding is a fools errand, its just playing around the edges of the problem.
The issue is that no one is going to buy it
It depends on what those banks are funding.
If they can't fund the residential property market, and THEY keep their models the same, what happens to them? They'll go broke, and that will affect more than just the onshore entities. So what will they do? Lend to other sectors at what will become a lesser rate. They'll have to if they want to stay in business.
Given how over extending things became you have to think its a combination of lower rates and lower prices.
Anyone who buys here, to exit in time, has to find an incredibly greater fool to sell to... who is also incredibly rich. Even minor price movements in housing averages could be bigger then average peoples ability to save over a year... ie its so overcooked its nuts, then factor in 80% lending inside DTIs....
Anyone buying and "topping" up a rental is a fool. You are just subsidising the renter. You have is no exit strategy with capital gain.
We are at the point now where buyers are offering what they can afford, and sellers are asking what they want.
They cannot afford this now, nor can they hedge future interest rate risk if rates fall in the short term.
$779k in Brisbane
https://www.realestate.com.au/property-house-qld-caboolture-144877368
Our young will keep leaving until we solve this, clearly the land did not cost 400k for this Brisbane property..... and build costs where lower
You could buy this type of build for reasonable money in Hamilton perhaps 8-10 years ago.
They do.
And anyone who was there to witness what happened last time - circa 1988-1993, will know how that ends. Surely we can learn from even that one foreign event and avoid the same fate? (It devastated the lives of millions of Britains, and took them untold years to recover from it - if at all. And yet, here they are again. And this time, the result will be worse).
One approach? "Cornwall plots 300pc council tax on second homes"
Ahh....memories...
"The summer of 1988 was drawing to a close and house prices were booming as never before. The Royal Institution of Chartered Surveyors went as far as to admit that the London market was looking sticky, but there was no evidence that prices were falling." ( sounds a bit like what we are reading here today!)
"Inflation in the whole economy in the late Eighties and early Nineties disguised the full extent of the underlying fall in house prices. In real terms, they declined nearly 34% from their 1989 peak to 1995 trough."
"Astonishingly, a house owner and wait until June 2002 before he was back to square one. Only then was his house, in real terms, worth as much as he paid for it in 1989."
"Experts were wrong in 1988 to say the only way was up. Building societies and estate agents were wrong, too. Home-owners must hope that this time, the experts are not making the same mistake."
Doesn't even break down by region its more pure location. In Tauranga over in the lakes in places it goes sub zero, like -1 Deg C its freezing, down low and no late or early morning sun. Where I am its evaluated and I don't see outside temps dropping much below 6 Deg C, that's a huge difference. Just standard insulation and double glazing is fine and I have lot of glass.
Look at construction today compared with construction when houses were in that 4X income band…it’s chalk & cheese 🤷🏻♂️
You could argue why would we want “unsafe” houses…but the houses from decades ago are still standing & have been through storms/earthquakes & the kids raised in them are still standing. I have said before the expectations of new builds is also different, walk-in wardrobe/ensuite/scullery/media room/home office/attached double garage with internal access…the additional labour & material costs needed to meet current standards & expectations is huge. Let alone the red tape costs before the first shovel hits the ground…if we met in the middle somewhere maybe, more moderate designed homes with adequate (not over the top) construction it could make building a home more efficient/affordable? Or…keep all the cool shit & ask the joker with the ranger & stabi to take a haircut 😂
That's the issues, it will be 15 years at that price before you can climb the "ladder" at 50 years old, do you want to take on another 500k of lending for the next step.... the ladder itself is too steep now without capital gains to climb it , lets go to aussie instead.
In a debt-based economy, rates (OCR) need to be lower than growth (GDP). Simply put, we need growth - rates > 0. If growth - rates < 0 = debt explosion.
Currently, with GDP around 0.2% (and potentially even dipping into negative territory with all the lags in reporting) and the OCR standing at 5.5%, the RBNZ should be implementing a ZIRP. Of course they won't and the rate cuts will be cosmetics at the start (highly likely 0.25% cuts). However, even if they decided to implement ZIRP today, the change wouldn't be immediate. Given the long and variable lags, it could take 12-24 months for such a policy shift to make an impact. Like other central banks, the RBNZ tends to be reactionary, often waiting to see the "iceberg" before taking action. Unfortunately, by the time you spot the iceberg, it is too late to save the Titanic.
So, what happens when you tighten credit in an already heavily indebted economy? You hit a grinding halt in economic activity, leading to an explosion in bankruptcies. According to Centrix's latest report, May 2024 saw the highest number of bankruptcies since May 2014 (a clear sign of the pain). This is all before we fully feel the effects of the tightening, with all the delays in economic feedback.
Unprecedented rate increase (2100%) over the shortest time frame for tightening + the longest peak period ever (15 months so far) + long and variable lags = massive demand destruction + debt defaults -> rising unemployment -> more demand destruction -> increased unemployment -> debt defaults -> deflation.
"In Māori mythology, Tāne Mahuta is the god of the forest and birds.
Māori oral traditions tell us that Tāne Mahuta dug his shoulders into Papatūānuku (mother earth) and used his legs to push against Ranginui (father sky) so as to separate them and let light into the world.
With that light, Tāne Mahuta the kaitiaki of the forest and birds, enabled life to thrive.
The Reserve Bank is akin to the being Tāne Mahuta of New Zealand’s financial landscape."
https://www.rbnz.govt.nz/hub/publications/speech/2022/speech2022-06-13
Yes, exactly. I wish more of the HFL folks understood the basics maths here. If we want interest rates of 5% then private debt needs to back down at 60% of GDP. It's 140% now.
When our economy is 'growing' at 3% it is because private debt is increasing by 4%, catalysed by house prices rising at 5%.
Investor lending is up because the LVR got relaxed from 40% to 35%, so they can borrow more.
Also, the interest tax deductibility change will have redirected investors from buying hugely negative cashflow, overpriced new builds to buying positive/neutral cashflow, cheaper existing builds, and when the numbers make sense surprise surprise, investors start buying again.
The real train wreck that is happening is all those new townhouse developments that were built for investors only, because they are not fit (or priced) for owner occupiers. Now that investors are no longer held hostage by Govt policy and forced to buy them, those nasty, low quality build, tiny boxes will languish unsold on the market until they start getting sold off in mortgagee sales.
Which brings me to the next train wreck in progress. The people who invested funds in the likes of DuVal, Williams Corporation, Wolfbrook. Many of these investors are pensioners who have invested their entire life savings in these funds, and they stand to lose the lot because the FMA saw fit to slap these developers with a letter telling them off, but did not make any of them return the funds to the retail investors that were illegal securities transactions under NZ Securities law. And they are still doing it despite that FMA letter. Desperate times means criminal conduct, right?
Then there will be a Govt enquiry into "how did we not see any of this coming". Yeah, right.
Music is stopping grab a chair quick
https://www.afr.com/markets/equity-markets/tech-reversal-pushes-us-mega…
Just like NZ Resi Real Estate, the Revenue from overhyped AI are not living up to the price premium that was paid.
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