Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


LVR restrictions have been a failed experiment

Nationwide property market analysis from Harcourts shows the LVR restrictions have been a failed experiment


The average house in New Zealand now sells for $502,306, which is a record high, up 12% on the same time last year and 8% on October, the month LVR restrictions were introduced.

In Auckland and Christchurch the restrictions and rising interest rates are having little effect on the market, with high demand and competition countering any moderating influence of the Reserve Bank.

Provincial New Zealand is where the LVR restrictions have been felt most keenly, however even here they are staring to lose their effect, with the average price up by 10% in the Central Region and 5% in Wellington. Buyers now understand there are ways around the need for a 20% deposit and are seeking assistance from second tier lenders, family and credit card debt.

The disparity between the markets in Christchurch and Auckland compared to the rest of the country is best indicated by a comparison of average prices. In Auckland you will pay over double what you will in the provincial South Island for the average house.

It is evident from Harcourts’ figures that the LVR restrictions have been a failed experiment. In the heated Christchurch and Auckland markets they have had little effect. Only first home buyers and investors in provincial New Zealand have been impacted upon. However, this is problematic as the LVR restrictions were not initiated to temper these already sluggish markets.

MarketWatch_April_2014.pdf

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Finance: Major Campaign To End "Gross Overtaxation Of Savings"

The campaign – which includes a special web site through which New Zealanders can e-mail their own and other MPs and party leaders – is backed by Age Concern, Consumer NZ, the Financial Services Council and the Taxpayers’ Union. More>>

ALSO:

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news